LONDON Oct 15 U.S. home owners have filed a
class action suit in New York against 12 of the world's major
banks, claiming that Libor manipulation made mortgage repayments
more expensive than they should have been, the Financial Times
reported on Monday.
It is the first class-action lawsuit filed by home owners,
according to the newspaper, which said other class action suits
have been brought by investors and municipalities.
The five lead plaintiffs include Annie Bell Adams, a
pensioner who had her home repossessed and whose subprime
mortgage was securitised into Libor-based collateralised debt
obligations and sold by banks to investors, the FT said.
The suit alleges that traders at banks in Europe and North
America, including Barclays, Bank of America
and UBS, were incentivised to manipulate the London
interbank offered rate to a higher rate on certain dates on
which adjustable mortgage interest rates were reset.
This resulted in homeowners paying more between 2000 and
2009, the FT quoted the complaint as saying.
The plaintiffs, who have lost thousands of dollars each,
could number 100,000, their Alabama-based attorney John
Sharbrough was quoted by the FT as saying. He declined to give a
figure on the total damages his clients are seeking.
Faith in the Libor interest rate system, which underpins
more than $300 trillion of contracts and loans from U.S.
mortgages to Japanese interest-rate swaps, plummeted after
Barclays was fined in June for rigging it. Other banks are