Barclays Settles Libor Probes for $100 Million -- WSJ
August 09 2016 - 3:02AM
Dow Jones News
By Aruna Viswanatha
Barclays PLC agreed to pay $100 million to end investigations by
43 states and the District of Columbia into its alleged
manipulation of the London interbank offered rate benchmark in the
mid-2000s, authorities said on Monday.
The settlement comes four years after the British bank resolved
similar charges with U.S. and U.K. authorities that had ignited a
firestorm and led to the resignation of its top leadership.
Attorneys general from multiple states led by New York and
Connecticut launched their own probes in 2012 in the wake of those
charges.
The states said government entities and not-for-profit groups in
their states were "defrauded of millions of dollars" when they
entered into swaps or other financial contracts based on Libor,
without knowing that Barclays and other banks were working to
manipulating the benchmark, according to a copy of the agreement
announced Monday.
"There has to be one set of rules for everyone, no matter how
rich or how powerful," New York Attorney General Eric Schneiderman
said in announcing the deal.
A Barclays spokesman said the bank was pleased to have resolved
the state investigations into "legacy" activities.
Multiple global banks including UBS Group AG and Deutsche Bank
AG have paid billions of dollars in penalties to resolve similar
criminal and civil charges that they manipulated Libor, which is
calculated based on submissions from a panel of banks.
In connection with the earlier settlements, Barclays and other
banks admitted to submitting inaccurate rates in an effort to move
the benchmark in a way that would benefit their trading positions.
Barclays also admitted to making inaccurate submissions during the
financial crisis to disguise liquidity problems.
Barclays is the first to resolve Libor manipulation allegations
from state attorneys general, and neither admitted nor denied the
states' allegations.
In the agreement, the states said their investigations into
Libor manipulation were "ongoing," and that Barclays's cooperation
"has been extensive" and "of substantial value in furthering" the
probes.
New York said the states would use $93.35 million portion to pay
"restitution" to agencies and organizations that lost money on
Libor-linked products. The rest of the fund will be used to cover
investigative costs and other uses, the state said.
Around $350 trillion of notional swaps and $10 trillion of loans
were indexed to Libor as of 2012, according to the British Bankers'
Association.
Last month, four former Barclays employees were sentenced to
prison terms by a London court in connection with the same
scheme.
Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com
(END) Dow Jones Newswires
August 09, 2016 02:47 ET (06:47 GMT)
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