Credit Unions Sue Mega-Banks Over LIBOR Manipulation
September 25, 2013
The National Credit Union Administration (NCUA) is suing JP Morgan & Chase Co (JPM), Barclays, Goldman Sachs, Morgan Stanley, Royal Bank of Scotland (RBS), UBS, Wachovia, Ally Services and Credit Suisse – among other technocratic institutions for the financial manipulation of trillions of dollars.
The NCUA said that these banks conspired to purposefully rig the London Interbank Offered Rate (LIBOR) that controls the rates set for mortgages, car loans, student loans, credit cards and derivatives contracts.
The suit outlines $2.3 billion in mortgage-backed securities (MBS) that were misrepresented and used as a primary mechanism for profit as the housing bubble began to grow.
Loans were handled improperly, misrepresented by the banksters and sold as safe investments with the aid of rating agencies who resold those MBS that eventually fell into default and foreclosure.
Dan Berger, president and CEO of the National Association of Federal Credit Unions (NAFCU) said: “Credit unions are paying hefty assessments to cover the costs of the corporates’ losses on mortgage-backed securities, and we support NCUA’s efforts to seek recoveries from the responsible entities.”
With the artificial lowering of rates from January 2005 to December 2010, credit unions are now being liquidated by regulators.
Those credit unions that are part of the suit are:
• US Central Federal
• Western Corporate Federal
• Members United Corporate
• Southwest Corporate
• Constitution Corporate
The suit states that LIBOR quotes were used as indicators of the financial temperament of the markets and this manipulation enabled the banksters to “portray themselves to the marketplace as financially healthier and more liquid than they actually were.”
Debbie Matz, board chair of the NUCA said: “We have a responsibility to pursue recoveries through every available avenue against those who caused billions of dollars in losses to credit unions. Some firms were manipulating international interest rates in a way that cost the five corporates (credit unions) to lose millions of dollars.”
In California, JPM is settling with the state of California over the MBS scandal, according to anonymous sources.
JPM is attempting to “settle a civil case that was to be filed accusing the bank of violating U.S. laws in its sale of mortgage bonds in California.”
Federal prosecutors in Philadelphia are being “briefed on the matter” and are involved in investigations of JPM’s sales of MBS.
The US Department of Housing and Urban Development (HUD) is entertaining “the possibility of striking a wide-ranging settlement to conclude many of the looming mortgage investigations from federal authorities and state attorneys general. But the housing agency floated a price tag of about $20 billion for the settlement.”
Shares for JPM are dropping on the stock market in response to their pending issues with the government.
In August, it was announced that the Department of Justice (DoJ) is conducting criminal and civil investigations on JP Morgan Chase & Co (JPM) after they announced their quarterly earnings.
Bank of America (BoA) is also under investigation from the DoJ and the Security Exchange Commission (SEC).
According to documents, JPM must respond to “parallel investigations being conducted by the Civil and Criminal Divisions of the United States Attorney’s Office for the Eastern District of California relating to mortgage backed securities (MBS) offerings securitized and sold by the Firm and its subsidiaries.”
Similarly, BoA was warned by the DoJ last week in relation to “one or two jumbo prime securitizations.” The DoJ and SEC intend to file both criminal and civil charges against the bank who sold alleged AAA residential mortgages from borrowers who were targeted by the bank because they had unverifiable income.
Between 2005 and 2007, customers were used by JPM and BoA to participate in this MBS scheme.
BoA was charged with defrauding investors to the tune of $850 million in MBS. The charge was filed in a North Carolina federal court.
BoA sold those MBS to:
• Wells Fargo
• The Federal Home Loan Bank of San Francisco
• Other “sophisticated” investors
The investors were promised that these mortgages were a safe investment. The bank never divulged that the “underlying loans were defaulting at high rates.”
BoA’s Merrill Lynch is also being charged because of their part in the collateralized debt obligations (complex securities) that are related to the MBS funneled by BoA.
Countrywide, who is owned by BoA, is also named in these charges.