State regulators announced a $100 million, 44-state settlement with a bank for fraudulent and anticompetitive conduct involving manipulation of the U.S. Dollar ("USD") London Interbank Offered Rate ("LIBOR") and other benchmark interest rates.

During the relevant period, the LIBOR was calculated daily in multiple currencies and based on rates reported by sixteen major banks (through their LIBOR submissions) as their perceived costs of borrowing. The settlement agreement provided evidence showing that:

  • the bank's managers instructed its LIBOR submitters to lower their USD LIBOR submissions in order to avoid the perception of "liquidity problems";
  • the bank submitted rates that often conflicted with the requirements of LIBOR as defined by the British Bankers' Association ("BBA");
  • the bank's employees believed that the LIBOR submissions of other financial institutions often were inappropriately low and ran contrary to the BBA definition of LIBOR;
  • the bank's derivatives traders made requests for favorable LIBOR submissions;
  • the bank's derivatives traders made or received interbank requests for favorable LIBOR submissions, and often agreed to pass on those requests to submitters; and
  • the bank failed to disclose, except to some of its counterparties, when its LIBOR submissions and those of other financial institutions were inappropriately low.

In addition to the approximately $100 million dollar settlement figure, the bank committed to reformed business practices including systems and controls designed to ensure compliance with policies and procedures regarding USD LIBOR and other benchmark interest rate submissions.

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