SONOMA COUNTY -- Sonoma County has joined a number of other municipalities and public agencies in a suit to recover losses on investments due to interest rate manipulation by U.S. and international banks, according to an announcement today.
Joining an initial group that filed suit in January of 2013, the county claims that manipulation of those rates caused reduced interest payments on investments that were tied to the London Interbank Offered Rate, or “LIBOR." Financial regulators in the United States, United Kingdom, Switzerland and Japan began looking into potentially unlawful manipulation of LIBOR in March 2011, under suspicion that banks had manipulated the self-regulated rate that is meant to describe the cost of borrowing funds from other financial institutions. Many other investment vehicles are influenced by LIBOR.
More than $2.5 billion in penalties have been paid by three LIBOR member banks: In June 2012, Barclays agreed to pay $450 Million after admitting it manipulated LIBOR with other member banks; in December 2012, UBS agreed to pay more than $1.5 billion; and in February 2013, Royal Bank of Scotland, agreed to pay $610 Million.
The county joins the Regents of the University of California and San Diego Association of Governments that filed suit this week. They join other individual public entity plaintiffs that filed the first round of lawsuits in January 2013 including East Bay Municipal Utility District, County of San Mateo, the San Mateo County Joint Powers Financing Authority, City of Richmond, City of Riverside, the Riverside Public Financing Authority, and the County of San Diego.
San Francisco's Cotchett, Pitre & McCarthy, LLP is representing Sonoma County and others in the case, which involves more than 20 current and former financial institutions.