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By Karen Freifeld
NEW YORK, March 19 (Reuters) - U.S. mortgage finance companyFreddie Mac is suing more than a dozen banks forlosses from the alleged manipulation of the benchmark interestrate known as Libor.
Bank of America Corp, JPMorgan Chase & Co, UBS AG and CreditSuisse Group AG are among the banks named as defendants in thelawsuit.
Freddie Mac, which invested in mortgage bonds and swaps tiedto U.S. dollar Libor, claims the banks colluded to rig thebenchmark from 2007 to 2010, according to the complaint, whichwas filed March 14 in U.S. District Court for the EasternDistrict of Virginia.
The banks worked together to artificially lower the U.S.dollar Libor "both to hide their institutions financial problemsand to boost their profits," the complaint said. The lawsuitseeks undetermined damages.
Freddie Mac and Fannie Mae, the two government-controlledmortgage companies, may have suffered more than $3 billion inlosses as a result of Libor manipulation, according to a memoobtained by Reuters in December.
The memo was sent to the Fannie and Freddie's regulator,the Federal Housing Finance Agency, by its inspector general.The watchdog urged the regulator to consider legal action.
Bank of America, JPMorgan Chase, UBS, Credit Suisse andother banks did not immediately respond to calls for comment ordeclined to comment.
More than a dozen banks have been under scrutiny byauthorities in the United States, Japan and Europe over claimsthey altered the Libor.
Freddie Mac said it discovered the fraud and collusion whenBritain's Barclays admitted in June it submitted false Liborsubmissions, according to the complaint. The bank agreed to pay$453 million that month to settle with British and U.S.authorities.
UBS was fined $1.5 billion in December for fiddling withinterest rates, and Royal Bank of Scotland Group settled withauthorities for $612 million in February.
Libor rates are calculated by asking banks the level theycan expect to borrow from other banks.
The Libor rates submitted by banks for different currenciesare compiled by Thomson Reuters, parent company of Reuters, onbehalf of the British Banking Association, which also is adefendant in the lawsuit.
The trade association could not be reached after hours forcomment.
The case is The Federal Home Loan Mortgage Corporation vBank of America, U.S. District Court for the Eastern District ofVirginia 13-cv-00342.
