Citigroup (C) Inc. has agreed to pay $23M in an institutional investor fraud lawsuit accusing the bank of conspiring to manipulated the Euroyen Tibor and yen Libor benchmark interest rates and Euroyen Tibor futures contracts. Plaintiff investors included hedge fund Hayman Capital Management LP and the California State Teachers’ Retirement System. They contend that Citigroup and other banks benefited their trading positions from ‘06 through at least ’10 when they conspired to manipulate rates. As part of the settlement Citigroup said it would cooperate with the plaintiffs, whose lawsuits are still pending against other banks.
Also settling but without having to anything is broker-dealer RP Martin. Defendants that have yet to settle include Barclays Plc (BARC), JPMorgan Chase & Co. (JPM), Deutsche Bank AG (DB), UBS AG (UBS), HSBCA Holdings Plc (HSBC), Sumitomo Mitsui Trust Holdings Inc., and Mitsubishi UFJ Financial Group Inc.
In other benchmark interest news, the United Kingdom’s Serious Fraud Office is under fire aftera jury found not guilty six defendants accused of rigging the London interbank Offered Rate. The men had argued that they were just doing their job and that either Tom Hayes, the former Citigroup and UBS broker who was convicted of rigging Libor, either duped them into participating in the scam or they didn’t know that they were engaged in wrongdoing with their actions. Some of them contended that they were too low in the ranks to be among the ones singled out over Libor rigging.
Another trial over Libor rigging allegations, this one involving ex-Barclays traders, is scheduled to begin this month and the Serious Fraud Office is also pursuing several people for allegedly manipulating Euribor.
Libor is used to establish interest rates for lending purposes on a number of financial transactions, including trillions of dollars of investments and loans. Everyday, member banks submit a figure determined by what rate they estimate they would charge were they to lend money to other banks. The rigging of Libor by big banks has led to probes that have resulted in billions of dollars of fines and settlements.
The SSEK Partners Group is an institutional investor fraud law firm.
Citigroup reaches $23 million ‘ice breaker’ yen Libor settlement, Reuters, February 2, 2016
Sixth Libor accused is found not guilty, FT Advisor, January 28, 2016