The City of Houston filed suit today for financial damages suffered from the manipulation of the interest rates on its investments against the banks that set the benchmark interest rate known as the London Interbank Offered Rate, or LIBOR. The lawsuit was filed in federal court in the Southern District of Texas by Richard Mithoff, of Mithoff Law Firm, the California law firm Cotchett, Pitre & McCarthy, LLP, and the Houston law firm The Chevalier Law Firm, PLLC, against more than 16 current and former financial institutions that set LIBOR, including Barclays, UBS, Bank of America, Royal Bank of Scotland, JP Morgan, and Citigroup.
“I have instructed the city legal department to aggressively pursue any monies owed the city,” said Mayor Annise Parker. “Any manipulation of rates paid by the taxpayers must be corrected.”
“The complaint filed in federal court specifically notes three examples of transactions in which the LIBOR manipulation was detrimental to the City of Houston,” said Mithoff. “Damages to the city resulting from this global interest rate manipulation could be substantial.”
Mayor Annise Parker and City council approved hiring Mithoff earlier this year. Mithoff currently represents the Texas Heart Institute in its contractual dispute with St. Luke’s Hospital System, and serves as well as lead co-counsel for shareholders in their class action suit against BP.
“Nobody questions the existence of the conspiracy, nobody questions that the rigging took place,” City Attorney David M. Feldman said. “The question is the amount of damages.” By bringing the case under federal antitrust laws, Feldman said, the city can seek three times the actual damages, plus attorney’s fees.