Twenty-two financial companies were sued by the State-Boston Retirement System on Thursday in a class action suit that accuses the banks of conspiracy to manipulate U.S. Treasury auctions that harmed both investors and borrowers.
According to Reuters, the pension fund has named Bank of America Corp’s Merrill Lynch unit, Citigroup Inc., Credit Suisse Group, Deutsche Bank, Goldman Sachs Group and 14 other defendants of “illegally trying to profit on the sale of Treasury bills, notes and bonds at investors’ expense.”
“The scheme harmed private investors who paid too much for Treasuries, and it harmed municipalities and corporations because the rates they paid on their own debt were also inflated by the manipulation,” Michael Stocker, a partner at Labaton Sucharow, which represents State-Boston, said in an interview. “Even a small manipulation in Treasury rates can result in enormous consequences.”
Image via flickr/Tax Credits