EU asset managers accuse US banks of Libor fixing

Three European asset management firms have accused banks including Bank of America Corp., JPMorgan Chase & Co., HSBC Holdings Plc, Barclays Bank Plc and Credit Suisse Group AG of conspiring to manipulate Libor.

FTC Capital GmbH of Vienna, FTC Futures Fund SICAV of Luxembourg and FTC Futures Fund PCC Ltd. of Gibraltar allege the banks sold Libor-based futures, options, swaps and derivative instruments “at artificial prices that defendants caused” thereby harming investors, according to Bloomberg.

For three years from 2006 to 2009, the banks “collectively agreed to artificially suppress the Libor rate” and in early 2008, “during the most significant financial crisis since the great depression,” the rate remained steady when it “should have increased significantly,” the funds contend.

The investment funds made the complaint on Friday in the New York federal court.

A person close to an investigation on possible Libor manipulation said last month the FSA was working with US regulators on the probe.

The US Justice Department, Securities and Exchange Commission and Commodity Futures Trading Commission are investigating, according to two people familiar with developments.

FTC Capital bought and sold derivatives based on Libor while the two other funds are part of FTC Capital, according to court papers.