/15/2012 @ 4:46PM
The Libor scandal that rocked Barclays is far from over for some of the world’s biggest banks.
JPMorgan Chase, Citigroup, UBS, Deutsche Bank, Royal Bank of Scotland, Barclays and HSBC have been subpoenaed by New York Attorney General Eric Schneiderman’s office for their roles in the rate-rigging.
That’s according to a source close to the matter who says there could be additional banks in the mix hit with subpoenas by the AG’s office.
Connecticut Attorney General General George Jepsen is working jointly on the investigation. More state AGs could join the effort.
The Libor investigations by the AGs are still in the information-collecting stage. What are they looking for? A whole host of ways manipulated Libor rates could have affected investors such as the impact on interest rate swap deals.
Banks being investigated for their role in the scheme are bracing for a long road ahead as both regulators, prosecutors and institutional investors examine the situation.
Large institutional investors like mutual fund companies are currently investigating how they were affected by the false rates. It’s been reported thatBlackrock is one of the firms that’s launched an internal investigation into whether their funds have been hurt by the rate-rigging.
Last month a small, New York bank with about $881 million in assets filed a lawsuit in against 21 banks including Citi, Barclays and Bank of Americaclaiming it is owed money as a result of the false rates.
Meanwhile the banks facing investigations are reportedly looking to settle with regulators as a group rather than individually.
When Barclays tried to come out first and settle allegations for rigging its Libor rate the firm paid a handsome fine of $450 million. The troubles didn’t end there. The firm’s CEO, Robert Diamond, and chairman, Marcus Agius, stepped down shortly after.
Schneiderman’s investigation comes as no surprise. He’s no stranger when it comes to bank investigations as he’s gone after all the major banks for their mortgage and foreclosure mishaps.
Many of the banks disclosed possible Libor-related troubles in their 10-Q filings. When asked about the NY AG’s subpoena Citi points to its disclosure in its 10-Q filing:
That’s according to a source close to the matter who says there could be additional banks in the mix hit with subpoenas by the AG’s office.
Connecticut Attorney General General George Jepsen is working jointly on the investigation. More state AGs could join the effort.
The Libor investigations by the AGs are still in the information-collecting stage. What are they looking for? A whole host of ways manipulated Libor rates could have affected investors such as the impact on interest rate swap deals.
Banks being investigated for their role in the scheme are bracing for a long road ahead as both regulators, prosecutors and institutional investors examine the situation.
Large institutional investors like mutual fund companies are currently investigating how they were affected by the false rates. It’s been reported thatBlackrock is one of the firms that’s launched an internal investigation into whether their funds have been hurt by the rate-rigging.
Last month a small, New York bank with about $881 million in assets filed a lawsuit in against 21 banks including Citi, Barclays and Bank of Americaclaiming it is owed money as a result of the false rates.
Meanwhile the banks facing investigations are reportedly looking to settle with regulators as a group rather than individually.
When Barclays tried to come out first and settle allegations for rigging its Libor rate the firm paid a handsome fine of $450 million. The troubles didn’t end there. The firm’s CEO, Robert Diamond, and chairman, Marcus Agius, stepped down shortly after.
Schneiderman’s investigation comes as no surprise. He’s no stranger when it comes to bank investigations as he’s gone after all the major banks for their mortgage and foreclosure mishaps.
Many of the banks disclosed possible Libor-related troubles in their 10-Q filings. When asked about the NY AG’s subpoena Citi points to its disclosure in its 10-Q filing:
Interbank Offered Rates-Related Litigation and Other Matters In connection with the investigations and inquiries regarding submissions made by panel banks to bodies that publish various interbank offered rates, certain Citigroup subsidiaries have received additional requests for information and documents from various U.S. and non-U.S. governmental agencies, including the offices of the New York and Connecticut Attorneys General.Other banks in the matter have yet to respond to messages sent late in the day.
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