A Colorado pension fund is suing Canada’s top six banks and three other lenders for allegedly manipulating a key Canadian lending rate, the Wall Street Journal reported. The Fire & Pension Association of Colorado filed the lawsuit in U.S. District Court in Manhattan on Friday and alleged that the banks engaged in an “unlawful conspiracy” to boost their derivatives trading businesses by manipulating the Canadian dealer offered rate (CDOR) between 2007 and 2014. The lawsuit names Canada’s largest banks, Bank of Montreal, the Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada and Toronto-Dominion Bank, along with Bank of America Merrill Lynch, Deutsche Bank AG and HSBC Holdings PLC. The CDOR is a benchmark rate that aims to reflect the cost of borrowing funds in Canada and is used to calculate interest on several financial instruments, including interest-rate swaps, forward contracts and other derivatives. It is calculated each business day by Thomson Reuters based on submissions from banks of rates at which they would be willing to lend. In the lawsuit, the Colorado pension fund noted that BofA, Deutsche Bank and HSBC “have collectively paid approximately $4.4 billion in fines to multiple government regulators for manipulating at least 11 benchmarks...” The suit alleges that their attempts to suppress CDOR are “part of a broader pattern of price fixing and collusion intended to benefit defendants’ trading businesses at the expense of investors.”
