Prato City Councilman Calls for `Baltimore'-Style Lawsuit vs. LIBOR Fraud
July 28, 2012 • 9:33AM

Prato, Italy City Councilman Nicola Oliva has called on the Prato city administration to follow the example of U.S. cities such as Baltimore, and lead an Italian class-action suit against the banks responsible for manipulating the LIBOR rate and selling toxic interest swaps to local Italian governments, authorities, and utilities, including the City of Prato itself.

In a press release today, Oliva states: "Prato should follow the example of the mayor and city council of Baltimore (U.S.A.) which became plaintiffs in an anti-trust legal action connected to financial instruments based on Libor. Let us lead a class action in Italy against banks suspected of having manipulated Libor, encouraged by prosecutors' action in Trani, the same prosecutors who are investigating rating agencies and have already indicted Standard & Poor's."

Oliva stressed that the Prato administration bought swap contracts from Dexia, which have cost the city EU1.8 million Euro in 2010, EU1.7 million in 2011 and will cost EU1.6 million in 2012. "As far as we know, there are connections between Barclays and Dexia — Barclays is managing the liquidation of a Dexia branch."

Announcing a motion in the City Council, Oliva concludes his statement by saying that "the Libor scandal makes it therefore more urgent and necessary to reintroduce a Glass-Steagall legislation: the commercial banking sector must be protected from the sharks' market."