Bank of America, JPMorgan Chase and UBS sued over 'illegal profits'

17 November 2009

Bank of America, JPMorgan Chase, UBS and several other banks are being sued over allegations they rigged sales of municipal derivatives.

The lawsuit has been filed by the Sacramento Municipal Utility District, which is also claiming illegal profits made from these sales were shared as kickbacks designed as consultancy fees.

It is alleged that Bank of America and others conspired to determine winners of municipal derivative auctions and co-ordinated their pricing before receiving some of the profits from their co-conspirators, reports Bloomberg.

According to the lawsuit, JPMorgan Chase and UBS were also part of the ring of banks that engaged in "allocating customers and markets for municipal derivatives, rigging the bidding process by which municipal bond issuers acquire municipal derivatives and conspiring to manipulate the terms that issuers received".

Earlier this month, Shelbourne Development began legal action against Bank of America over allegations it had deliberately miscalculated the loan interest rate it was charging the property development firm for funds to help build the now-postponed 150-storey Spire Building in Chicago.

By Asim Shah

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