July 9th 2012

LIBOR Manipulation Scandal May Have Cost Nassau County Taxpayers up to $13 Million

Comptroller Working with County Attorney to recover lost funds

Nassau County Comptroller George Maragos called for action in response to alleged rigging by the major global financial institutions of the benchmark LIBOR (London Interbank Offered Rate) which may have resulted in the County having been defrauded by up to $13 million. The manipulation potentially caused Nassau County to have overpaid on its LIBOR variable SWAP Agreements backing $600 million in bonds held through the Nassau County Interim Finance Authority (“NIFA”), since 2004.

The City of Baltimore, facing a similar situation, recently filed a Class Action lawsuit against the major banks alleging LIBOR rate manipulation resulting in SWAPS overpayment by as much as 0.4%. Assuming the same conditions as alleged in the City of Baltimore’s Class Action, Nassau County would have overpaid and have been defrauded by up to $13 million on its $600 million worth of SWAPS-backed bonds during the alleged manipulation period.

"I have asked the County Attorney to vigorously investigate and bring legal action, if appropriate, on behalf of the taxpayers of Nassau County to recover any and all overpayments, including punitive damages where statutorily available,” said Comptroller Maragos.