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August 27, 2012

Suits Mount in Rate Scandal

“Banks being probed for interest-rate manipulation face potentially tens of billions of dollars in claims from dozens of lawsuits in the U.S. from cities, insurers, investors and lenders who say they were hurt by the allegedly fudged rates.

The allegations come from parties as varied as individual investors and institutions like Charles Schwab Corp. that say they were cheated out of returns on bonds with artificially low rates, to cities and hedge funds with financial contracts squeezed by traders who allegedly colluded with each other.

The exact number of cases isn’t clear, but they have been piling up for months, a review of federal- and state-court filings by The Wall Street Journal shows. Barclays PLC’s settlement with U.S. and U.K. regulators in June for about $450 million triggered a burst of new lawsuits against the British bank and other financial institutions now under investigation, including Bank of America Corp., Citigroup Inc. and J.P. Morgan Chase & Co.

“This is just the beginning,” said Michael Hausfeld, a lawyer at law firm Hausfeld LLP in Washington, D.C., who is representing plaintiffs in several cases. “Scores of interested potential clients” have called, he said.”

​Read Jean Eaglesham’s full article here

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