Investigative journalist Daniel Denvir reports that the Philadelphia school district may sue banks and Wall Street firms that sold defective financial instruments to the school district, causing massive losses.

Denvir writes:

“Philadelphia and other cities have filed similar lawsuits, contending that such “interest-rate swaps” — billed as a protection against rising borrowing costs — were tilted in banks’ favor through the fraudulent rigging of the London Interbank Offered Rate, or Libor.

“The School District took out swaps with Wachovia (purchased by Wells Fargo in 2008), Merrill Lynch, Goldman Sachs and Morgan Stanley. But a lawsuit could name more banks as defendants. Philadelphia’s lawsuit names banks that were direct counterparties and also those that are accused of rigging Libor, including Citi, JPMorgan, RBC, Bank of America, Barclays, Credit Suisse, Deutsche Bank, RBS and UBS.”