Charles Schwab Corp., whose antitrust claims against banks over manipulation of the London interbank offered rate (Libor) were tossed from federal court in New York, sued Bank of America Corp. and other financial institutions for fraud in state court in San Francisco, Bloomberg News reported today. Schwab alleged in a complaint filed on April 29 that it and other company entities purchased billions of dollars in Libor-based instruments that are paying artificially low returns because the banks agreed to depress the rate. Bank of America and other banks won dismissal in March of more than two dozen interrelated federal antitrust cases in federal court in Manhattan brought by San Francisco-based independent brokerage Schwab and other institutional investors. U.S. District Judge Naomi Reice Buchwald ruled that the plaintiffs were unable to show they were harmed. In its new complaint against more than a dozen banks, Schwab alleges they concealed their conduct even after questions were raised beginning in 2007 about potential Libor manipulation. The lawsuit includes claims of fraud, unjust enrichment, violation of California unfair business practices and federal securities laws and seeks to rescind purchases of Libor-based instruments.
