Barclays to Pay $20M To Settle Libor Manipulation

Barclays PLC (BARC) has consented to pay $20 million to settle complaints over the manipulation of the London interbank offered rate benchmark. As part of the accord, the bank will cooperate with a group of Eurodollar-futures traders that have filed lawsuits against other banks over Libor manipulation.

The deal resolves claims by firms and individuals that traded in Eurollar futures contracts and options on exchanges that were Libor based from 1/1/05 to 5/31/10. Now, a district court judge in Manhattan must approve the settlement.

This is the first settlement reached in the U.S. antitrust litigation involving investments linked to Libor. In addition to paying the $20 million, Barclays will help traders with their claims against other banks. This will include giving documents and information and other support to the plaintiffs so that they can bolsters their cases.

Authorities around the world have been looking into claims that over a dozen banks modified the submissions for establishing Libor and other benchmarks to make money from bets on interest-rate derivatives or cause their finances look more robust. In 2012, U.K. and U.S. authorities fined Barclays $469 million related to benchmark rate manipulation.

Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM), and Citigroup (C) are some of the other banks that were sued over allegedly manipulating Libor.

Meantime, regulators are trying to reach a settlement over rate-rigging allegations made against Deutsche Bank AG (DBK). According to The New York Times, U.S. prosecutors are considering whether to get the bank to plead guilty to interest-rate rigging.

Also under investigation of suspected wrongdoing related to currency manipulation are UBS (UBS), JPMorgan Chase, Barclays (BARC), Citigroup, and several other banks. Past resolved cases against these firms could be opened up if any misconduct was discovered that potentially violated earlier settlements related to interest rate manipulation.

Meantime, in the United Kingdom, the Financial Conduct Authority may be close to reaching settlements with JPMorgan, Citigroup, HSBC (HSBC) the Royal Bank of Scotland, and UBS. The agreement could potentially be a collective one.

U.S. May Press Deutsche Bank for Guilty Plea on Libor, NYT Says, Bloomberg, October 6, 2014

Barclays to pay $20 million to settle U.S. class action over Libor, Reuters, October 8, 2014

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