A new federal class action suit filed in Manhattan brings claims against Bank of America and other financial institutions currently under investigation by the Justice Department for the manipulation of Fannie Mae and Freddie Mac bonds.

The suit claims traders at the banks looked to rig the system that provided generous profits during the run-up to the housing bubble bursting last decade, according to the filing in the U.S. District Court for the Southern District of New York.

The suit — and the reported investigation by federal authorities — stems from the two federally backed providers that undergird the nation's housing financing. The pair issue unsecured bonds, known as FFBs, which currently total an estimated $550 billion in securities.

The focus of the lawsuit is on the secondary market trading on these securities, which a host of financial firms have access to through an application process to become part of Fannie and Freddie's dealer group. These companies, therefore, according to the complaint, control the FFB supply available to investors.

The plaintiffs claim that they are being harmed by the financial companies, who are exploiting their control over the supply chain to create “an opaque secondary market to facilitate the collision and reap supra-competitive profits at the expense of their own clients.” The suit claims the companies are in violation of the federal Sherman Act.

The complaint relies on a June 2018 report from Bloomberg that DOJ antitrust and criminal division investigators are looking into collusion to fix prices, as well as potential fraud prosecutions. A spokeswoman for the DOJ did not respond to a request for confirmation that the investigations were ongoing.

The class action focuses on banks involved in the bond trading market. The banks allegedly work together to inflate the price of newly issued FFBs to be sold to investors after Fannie Mae and Freddie Mac provide them to the dealers. This, the plaintiffs claim, runs against the realities of the market, which contracted substantially in the wake of the financial crisis.

“After the financial crisis the volume of new issuances began to decline, which resulted in reduced profits for the defendants' desks underwriting and trading FFBs,” the complaint states. “Rather than adapt to the new reality by developing ways to compete, defendants adjusted by unlawfully manipulating it in their favor.”

The suit is brought by the Deerfield Beach Municipal Firefighters Pension Trust Fund. The fund's counsel, private attorney Linda Nussbaum, did not respond to a request for comment.

Spokesmen for the named defendant, Bank of America, did not respond to a request for comment.