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Sonoma County sues over LIBOR banking scandal

Sonoma County has filed its own lawsuit against LIBOR — the collection of banks caught in an international rate-fixing scandal — alleging it was short-changed on investment returns.

The suit filed Friday in U.S. District Court in San Francisco seeks a return of undetermined losses to local investing agencies including schools, special districts and county government.

It comes on the heels of similar suits from San Mateo County and the University of California claiming damages from financial institutions that set the London Interbank Offered Rate, which is the global benchmark for interest rates.

"It's a question of making sure whatever wrong is made right," said Jonathan Kadlec, Sonoma County's assistant treasurer-tax collector.

Named in the suit are more than 20 current and former LIBOR members including Barclays, Bank of America and Citigroup.

The complaint lists seven causes of action such as fraud, unjust enrichment and violation of antitrust laws.

It focuses on transactions from 2007 to 2010, a period in which Barclays has already admitted its role in manipulating interest rates, said Nanci E. Nishimura, an attorney representing the county in the suit.

"Everybody has been affected by the manipulation," Nishimura said. "We can't afford to take the brunt."

Kadlec, who oversees a countywide investment pool of about $1.5 billion, said an investigation is ongoing to determine the extent of the losses.

He said LIBOR-type investments are a relatively small percentage of the total pool. They involve floating securities in which interest was based on the index, he said.


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