Banks Try To Escape Philly, Baltimore Bond Rate-Rigging Suit

Law360 (July 31, 2019, 2:35 PM EDT) -- A slew of major banks, including Bank of America, Barclays and Goldman Sachs, have urged a New York federal court to exclude them from an antitrust suit accusing them of conspiring to artificially inflate the interest rates on securities known as variable-rate demand obligation bonds.

The consolidated suit, brought by Philadelphia and Baltimore city officials, alleges the financial institutions manipulated the rates set for the VRDOs, which are tax-exempt bonds used to fund major municipal projects. VRDO interest rates are reset on a daily or weekly basis to keep them as low as possible.

But the banks framed the allegations in...

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