By David Enrich
LONDON-- Lloyds Banking Group PLC is in "late-stage settlement
discussions" with authorities over its alleged attempts to
manipulate benchmark interest rates, the U.K. lender said
Friday.
The settlement with U.S. and British authorities, expected next
week, is likely to involve Lloyds paying up to several hundred
million dollars in penalties, according to a person familiar with
the matter.
Lloyds, which is 25%-owned by the British government after a
taxpayer bailout, will become the seventh financial institution to
settle the long-running U.S. and British probes into attempted
rigging of the London interbank offered rate, or Libor, and other
benchmark interest rates. In addition to Lloyds, three of those
institutions-- Barclays PLC, Royal Bank of Scotland Group PLC and
ICAP PLC--are British.
The investigation into the alleged attempts by Lloyds employees
to manipulate Libor has been going on for years, according to
people familiar with the matter. The Wall Street Journal reported
last week that talks had recently accelerated and were expected to
yield a settlement in coming weeks.
Lloyds has said it is cooperating with investigators. It isn't
clear how big a role the bank played in the Libor scandal.
Executives privately have said that their bank's role was
relatively minor, limited to a small number of employees.
Part of the settlement is likely to focus on attempts by Lloyds
traders to manipulate the Japanese yen variety of Libor. British
fraud prosecutors previously have listed Lloyds as one of the banks
whose traders allegedly worked, directly or indirectly, with former
UBS AG and Citigroup Inc. trader Tom Hayes to manipulate yen Libor.
Mr. Hayes has pleaded not guilty to U.K. fraud charges.
Write to David Enrich at david.enrich@wsj.com
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