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FDIC sues banks for LIBOR manipulation, links rigging to Doral Bank failure


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FDIC sues banks for LIBOR manipulation, links rigging to Doral Bank failure

The Federal Deposit Insurance Corp. is suing several banks in a push to recoup the losses from Doral Bank's failure.

When San Juan, Puerto Rico-based Doral was shuttered in 2015, it cost the Deposit Insurance Fund an estimated $748.9 million. Now the FDIC is calling for a jury trial, as it argues financial institutions colluded to manipulate London Interbank Offered Rate and that the rigging negatively impacted Doral's loan portfolio and derivative holdings.

The FDIC, in its lawsuit, said the Puerto Rican bank's "losses flowed directly from, among other things, the harms to competition caused by the fraud and collusion alleged in this Complaint."

The defendants are U.S.-based Bank of America NA, JPMorgan Chase Bank NA and Citibank NA; Royal Bank of Canada; the U.K.'s British Bankers' Association, BBA Enterprises, BBA Trent Ltd., Barclays Bank Plc, HSBC Bank Plc, Lloyds Banking Group Plc, Lloyds Bank Plc and Bank of Scotland Plc; Germany's Deutsche Bank AG and Portigon AG; France's Société Générale SA; Switzerland's UBS Group AG, Credit Suisse Group AG and Credit Suisse International; the Netherland's Rabobank; and Japan's Norinchukin Bank and Bank of Tokyo-Mitsubishi UFJ Ltd.