Baltimore files antitrust suit against 10 major banks, alleging illegal rate inflation costing citie

[nitpicker]

http://www.baltimoresun.com/business/bs-bz-baltimore-sues-banks-20190326-story.html

Baltimore files antitrust suit against 10 major banks, alleging illegal rate inflation costing cities billions

Colin Campbell
The Baltimore Sun

March 26, 2019, 7:00 PM

Baltimore is suing 10 major banks, alleging they illegally inflated interest rates for particular bonds for public works — overcharging Baltimore and other municipalities by billions of dollars.

The city is seeking class-action status for the federal antitrust lawsuit, saying the banks inflated costs for the city and other local governments, which Baltimore seeks to represent. That takes money away that could be spent on schools, police, roads, sewer lines and the like.

The lawsuit, filed in the Southern District of New York, alleges that Bank of America, Barclays Bank, BMO Financial Group, Citibank, Fifth Third Bank, Goldman Sachs, JP Morgan Chase, Morgan Stanley, Royal Bank of Canada and Wells Fargo Bank colluded to fix interest rates of the tax-exempt bonds, known as variable rate demand obligations (or VRDOs), from 2007 until 2016.

Baltimore, which has issued more than $260 million of the bonds, said the banks “conspired in a coordinated and confidential scheme” from at least August 2007 to June 2016 to collect billions in unearned fees from the city and others on the bonds, which are used to pay for major, long-term city infrastructure projects.
(snip)

Baltimore is joining a growing group of municipalities and states suing over how banks handle variable rate demand obligations. Philadelphia sued a group of banks in February with much the same arguments and also seeking class-action status, according to a Reuters report. The state of New York, as well as California, Illinois and Massachusetts, all have sued banks, too, according to a report in The Bond Buyer trade publication.
(snip)