13 Global Banks Sued by Alaska Fund for ISDAfix Rigging of 170 TRILLION DOLLARS WORTH OF DERIVATIVES
Investmentwatchblog.com
September 7th, 2014
Legal hassles continue to trouble major global banks. Alaska Electrical Pension Fund has filed a lawsuit in the U.S. District Court, Southern District of New York, suing as many as 13 international banks. The lawsuit pertains to the banks’ alleged manipulation of ISDAfix rates, a benchmark used to appraise interest rate derivatives, commercial real estate mortgages and structured debt securities.
The sued banks include JPMorgan Chase & Co. ( JPM ), Bank of America Corp. ( BAC ), Citigroup Inc. ( C ) and HSBC Holdings Plc ( HSBC ). Per the lawsuit, the banks colluded to rig ISDAfix rates by rapidly executing trades just before the rate was supposed to be determined and delaying the processing of trades until it was fixed. This allowed the banks to manipulate the payments made to investors on derivative trades.
Such action adversely impacted approximately $170 trillion worth of financial instruments tied to ISDAfix rates. The lawsuit seeks unspecified damages for violating the U.S. antitrust and commodities laws.
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