As reported by the Baltimore Sun, the city of “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 “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.” Numerous municipalities and states have sued over how banks handle variable rate demand obligations. Philadelphia sued a group of banks seeking class-action status, according to a Reuters report. The state of New York, California, Illinois and Massachusetts, all have sued banks, too, according to a report in The Bond Buyer trade publication.
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