RBC Amongst Defendants in Massive Law Suit

The United States Federal Deposit Insurance Corporation (FDIC) filed a lawsuit in federal court in Manhattan on March 14th against sixteen banks, including RBC, alleging fraudulent activity in conspiring to keep a key international interest rate artificially low for their own enrichment.

Four of the named defendants (Barclays, the Royal Bank of Scotland, UBS of Switzerland and Rabobank of the Netherlands) have already paid about $2.6 billion American dollars to settle charges of rigging the London Interbank Offered Rate (LIBOR) from U.S. and European regulators. In June of 2012, Barclays in the U.K. admitted to submitting false information to keep the LIBOR low.

It is alleged by the FDIC that the banks rigged the LIBOR from August 2007 to at least mid-2011.

The LIBOR “affects trillions of dollars in contracts around the world, including mortgages, bonds and consumer loans” said the Financial Post in an article written shortly after the lawsuit became public knowledge.

Early next year NYSE Euronext, the London-based company that owns the New York Stock Exchange, will take over the role of supervising the LIBOR.