NY, other states reach $100M settlement with Barclays Bank

The investigation, conducted by a multistate working group of 43 State Attorneys General and the District of Columbia and led by the Attorneys General of NY and CT, revealed that Barclays manipulated LIBOR through two different kinds of fraudulent and anticompetitive conduct.

British financial giant Barclays Bank PLC on Monday reached a $100 million settlement with 44 USA states and the District of Columbia over interest rate manipulation in the financial crisis era.

He said: “There has to be one set of rules for everyone, no matter how rich or how powerful, and that includes big banks and other financial institutions that engage in fraud or impair the fair functioning of financial markets”. LIBOR is used as a benchmark for interest rates and has widespread impact on global markets and consumers. During periods from 2005-07 and into at least 2009, Barclays also sought to benefit their own trading positions by asking submitters to change their LIBOR settings.

Schneiderman said entities with Libor-linked swaps or other investment contracts with Barclays will be notified if they’re eligible to tap the settlement fund. The investigation was led by the Attorney Generals offices in NY and CT.

However, Barclays has been accused of dishonestly presenting the rates it submitted.

Barclays is among a handful of other banks hit with major criminal fines by the USA government in connection with the LIBOR scandal.

Meanwhile, from about 2007 and 2009, managers are said to have instructed submitters to send in rates lower than they otherwise would, so Barclays could avoid appearing like it was financial hot water and therefore needed to shell out more than its competitors to borrow funds.

Last month the bank reported a 21% fall in half-year profits to £2bn as it set aside an extra £400m to cover the costs of compensating customers who were mis-sold Payment Protection Insurance (PPI) – another past scandal that continues to dog lenders.

At times, those requests came from traders outside the bank, and Barclays traders agreed to pass them along to Barclays’ submitters, thus colluding with other banks.

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