Fannie Mae sued nine banks, alleging that their manipulation ofthe benchmark London interbank offered rate (Libor), which four ofthem have admitted, cost the mortgage-financing company about $800million.

The U.S. government-owned firm alleged that the banks, includingBank of America Corp., JPMorgan Chase & Co., and CitigroupInc., acted to suppress the rate through quotes they submitted tothe British Bankers Association, according to the complaint filedyesterday in Manhattan federal court.

Global authorities have been investigating claims that more thana dozen banks altered submissions used to set benchmarks such asLibor to profit from bets on interest-rate derivatives or to makethe lenders' finances appear healthier.