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Philadelphia Sues Seven Banks Over ‘Collusion’ in Muni Deals

  • Suit follows others making similar claims in state courts
  • City alleges that banks fixed prices on variable-rate debt
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Philadelphia Files Class Action Lawsuit Against Seven Banks Over Muni Deals
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Philadelphia sued seven banks including JPMorgan Chase & Co. and Bank of America Corp., accusing them of costing local governments billions of dollars by colluding to fix the prices on floating-rate bonds issued to finance public works.

The city alleges the banks conspired to inflate the interest rates on the bonds from as early as 2008, according to a class-action filed in federal court in Manhattan on Wednesday. According to the complaint, the Justice Department opened a preliminary criminal investigation into the banks’ practices after meetings with a whistle-blower in 2015 and 2016. The Securities and Exchange Commission has contacted at least four banks “regarding their conduct in the VRDO market,” according to the complaint.