In a complaint filed in Federal District Court in Manhattan, Fannie Mae, the government-controlled mortgage company, accused the banks of conspiring for many years to suppress the London Interbank Offered Rate, known as Libor, including during the 2008 financial crisis.
Libor underpins hundreds of trillions of dollars of transactions and is used to set interest rates on such things as credit cards, student loans and mortgages.
But according to Thursday’s 71-page lawsuit, “defendants’ promises and representations regarding the legitimacy of Libor were false,” causing Fannie Mae to lose money on swaps, mortgages, mortgage securities and other transactions.
American and European regulators have been investigating claims that many banks manipulated Libor and other rate benchmarks to increase profits or appear healthier than they actually were.
Four of the banks sued by Fannie Mae — Barclays, Rabobank, Royal Bank of Scotland and UBS — have previously settled with regulators over similar accusations and admitted wrongdoing.
The other bank defendants are Bank of America, Citigroup, Credit Suisse, Deutsche Bank and JPMorgan Chase.
Freddie Mac, another government-controlled mortgage finance company, filed a similar lawsuit in March against more than a dozen banks.
Rabobank, based in the Netherlands, had no immediate comment on the lawsuit. The remaining banks declined to comment.
The lawsuit describes emails and other communications that illustrate the suspected collusion, like where one rate submitter at Rabobank admitted to have “always used to ask if anyone needed a favor and vice versa,” adding, “A little unethical but always helps to have friends.”
According to the complaint, the banks’ Libor submissions were “particularly striking” on days where they settled large swap positions with Fannie Mae. The company estimated that it lost $332 million on interest-rate swaps alone.
“Fannie Mae filed this action to recover losses it suffered as a result of the defendants’ manipulation of Libor,” a spokesman said. “We have a responsibility to be good stewards of our resources.”
The United States government bailed out Fannie Mae and Freddie Mac in 2008. Both companies are now overseen by the Federal Housing Finance Agency, which tries to conserve and recover assets for the benefit of taxpayers.
In 2011, the agency sued 18 banks and financial companies to recover losses that it said Fannie Mae and Freddie Mac suffered on about $200 billion of mortgage securities.
JPMorgan last week became the fourth defendant to settle in that litigation, agreeing to pay $4 billion.