Legal News

Lawsuit Filed Against US Banks Regarding Libor
Download PDF
1 Star2 Stars3 Stars4 Stars5 Stars (No Ratings Yet)

Regulators have begun a global investigation into the manipulation of interest rates by big banks. The investigation has led a bank from Wisconsin to file a lawsuit that accuses JPMorgan Chase & Co, Bank of America Corp, Citigroup Inc and other big banks of colluding to set the rates at low prices. The bank, the Community Bank & Trust of Sheboygan, claims that the London interbank offered rate has been manipulated to remain low. The rate is commonly known as Libor. The world’s largest banks determine the Libor in London. It is used to set the interest rates on credit cards, student loans, mortgages and much more.

The lawsuit was filed late in May by Charles Tompkins of the Boston law firm Shapiro Haber & Urmy on behalf of the bank, which has 11 branches and assets of $554 million. The lawsuit is seeking the status of class action so other community banks can join in the litigation. Tompkins’ firm has handled antitrust, consumer and securities lawsuits. Tompkins said that community banks in the United States might have lost over $1 billion over the past four years from loans to small businesses because of artificially low rates. The banks are accused of violated the RICO Act, which is short for Racketeer Influenced Corrupt Organizations, by rigging the rates.


Community Bank & Trust said in its complaint that if the Libor was underestimated by 80 basis points in 2008, it would have lost $64,000 in interest income on the $8 million of floating rate loans. The lawsuit defines the 7,000 U.S. community banks as having assets of $1 billion or less. The lawsuit is asking for damages of $448 million in damages for 2008 alone.

“If the allegation of Libor manipulation by the largest banks is found to be true,” small banks need to consider “legal and all other means available,” said Daryll Lund, president of the Community Bankers of Wisconsin.

The president of Pacific Premier Bank of Costa Mesa, California, Steve Gardner, said that he wants to learn more regarding the impact of rate manipulation on his bank before deciding if his bank should join the lawsuit. Gardner said that his bank used the Libor to set rates for loans issued to accountants, bakeries and manufacturers.

Get JD Journal in Your Mail

Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!

Michael Kubacki, the chief executive officer for Lake City Bank in Warsaw, Indiana, said that “it’s not going to cause any heartburn” if some customers borrowed at lower rates. Anthony Jovanovich, the CEO of Community Bank & Trust, was surprised that the law firm used his company as the head plaintiff in the lawsuit but did say that he supported the lawsuit.


Interesting Legal Sites You May Like




Search Now

Litigation Attorney with 3-5 years of products liability experience

USA-CA-San Francisco

San Francisco office of our client seeks litigation attorney with 3-5 years of experience. The ideal...

Apply Now

Senior Litigation Attorney with some experience


Irvine office of our client seeks senior litigation attorney. The candidate should preferably have c...

Apply Now

Trademark Attorney with 5+ years of prosecution experience

USA-CA-San Diego

San Diego office of our client seeks trademark attorney with 5+ years of prosecution experience. The...

Apply Now

Global Sourcing and Technology Attorney with 2-4 years of experience


Dallas office of our client seeks global sourcing and technology attorney with 2-4 years of experien...

Apply Now


Paralegal / Legal Assistant


Busy AV rated Rockville criminal and family law firm looking for experienced administrative assistan...

Apply now

Environmental Associate

USA-NJ-West Orange

Chiesa Shahinian & Giantomasi PC has an immediate opening for an environmental associate to join our...

Apply now

033477 - Senior Counsel


To be fully engaged in providing Quality/No Harm, Customer Experience, and Stewardship by providing ...

Apply now

Paralegal - Insurance Defense


Downtown Insurance Defense Law Firm seeks an experienced paralegal with at least 3-5 year\'s experie...

Apply now

Most Popular


To Top