Big banks sued for price-fixing GSE bonds

The state of Pennsylvania is bringing a class-action lawsuit against more than a dozen of the world’s biggest financial institutions for allegedly price-fixing bonds issued by government-sponsored enterprises Fannie Mae and Freddie Mac.

The lawsuit claims that the financial institutions – which include Bank of America, Barclays Capital, BNP Paribas, Citigroup and more – conspired to fix the prices of more than $485 billion in GSE bonds over five years by both overcharging and underpaying investors.

An article from HousingWire explains that the bonds are not mortgage bonds, but rather bonds to support the GSEs’ operations and “are traded ‘over the counter.'”

 

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