NEW YORK (TheStreet) -- The Federal Deposit Insurance Corp. has named Bank of America (BAC), JP Morgan (JPM), Citigroup (C) and 16 other major banks in a lawsuit that alleges the financial institutions conspired to keep a key global interest rate low in an effort to enrich themselves.
The FDIC has accused the group of banks responsible for setting the London Interbank Offered Rate -- LIBOR -- of the "manipulation and suppression" of the rate resulting in the defrauding of banks not in on the scheme. The FDIC suit seeks unspecified damages, but does name 38 banks as being harmed by the LIBOR scandal.
The LIBOR rate underpins $350 trillion in derivatives and $10 trillion in loans around the world as estimated by the US Commodities Futures Trading Commission. The suit alleges that the illegal manipulation took place from April 2007 through mid-2011.
Charges include breach of contract, unjust enrichment, fraud, conspiracy and negligent misrepresentation.