JPMorgan

The city of Philadelphia, Pennsylvania is suing Bank of America (BAC), Goldman Sachs (GS), Citigroup (C), Wells Fargo & Co. (WFC), Barclays Plc (BAR), JPMorgan Chase & Co. (JPM), and Royal Bank of Canada (RBC) for allegedly rigging rates for variable-rate demand obligations (VRDOs). Philadelphia had issued over $1.6B of these bonds.

VRDOs are tax-exempt municipal securities that can be redeemed by investors early because they are tendered to banks. The banks can then remarket the bonds to other investors while charging issuers a fee.

According to InvestmentNews, the city is looking to represent a number of hospitals, municipalities, and universities with its lawsuit. The complaint contends that the banks worked with each other to manipulate the VRDO rates in secret so they could make hundreds of millions of dollars in unearned fees. The alleged rigging occurred between 2/2008 and 6/2016. The collusion purportedly involved the banks agreeing not to compete against each other for re-marketing services.

A preliminary $182M settlement has been reached in a benchmark rigging lawsuit between investors and banks Citigroup Inc. (C) and JPMorgan & Chase (JPM). Now, a federal judge must approve the deal, which would end claims accusing the two financial firms of manipulating the Euribor (Euro Interbank Offered Rate).

The benchmark interest rate is the average rate at which European banks are able to lend money to each other. It also is a key rate used for establishing certain loans.

It was just earlier this year that Euribor investors arrived at a $309M settlement over allegations that Barclays PLC (PLC), Deutsche Bank AG (DB), and HSBC Holdings Plc. (HSBC) had conspired to rig Euribor. Now, as part of this latest Euribor fraud settlement, JPMorgan and Citigroup have agreed to work with investors in their attempts to go after foreign defendant banks who were dropped from this lawsuit last year due to a lack of personal jurisdiction.

Articles Tagged with JPMorgan

Philadelphia Sues Citigroup, Goldman Sachs, Bank of America and Other Big Banks, Alleges Municipal Bond Rigging

JPMorgan Chase and Citigroup Settle Euribor Investor Case for $180M