Deutsche Bank AG (DB) has settled with 45 US states and will now pay $220M to resolve allegations that it engaged in rigging the London Interbank Offered (LIBOR) rate and other benchmark interest rates. According to the settlement, the bank admitted that its managers and traders took part in benchmark rigging from ’05 to ’09.
A press release issued by New York Attorney General Eric Schneiderman states that Deutsche Bank “acted unlawfully,” including that:
· The bank defrauded counterparties when it didn’t disclose that it was making LIBOR submissions that were “false or misleading.”
· Its traders tried to influence the LIBOR submissions of other banks so that Deutsche Bank would benefit.
· The bank knew that other banks were rigging LIBOR, too.
· Deutsche Bank didn’t disclose that the other banks’ LIBOR submissions were not accurate reflections of their borrowing rates or that the published rates were not accurate to the submitting banks’ real borrowing costs.