Citibank to Pay $425 Million to Settle Cases Over Alleged Benchmark Manipulation
25 May 2016 - 11:58PM
Dow Jones News
By Aruna Viswanatha
Citibank N.A. agreed to pay $425 million to end long-running
civil probes into the bank's alleged manipulation of key
benchmarks, becoming the first U.S. bank to resolve claims related
to the Libor benchmark.
The bank agreed to pay $250 million to resolve claims from the
Commodity Futures Trading Commission that it attempted to
manipulate the ISDAFIX benchmark swaps rate, and an additional $175
million to resolve claims from the regulator that it tried to rig
the Yen Libor and Euroyen Tibor interest rate benchmarks.
The settlements are the latest to stem from a yearslong
investigation by the CFTC, the Justice Department and European
authorities into allegations that top global banks tried to game
interest rate and foreign exchange benchmarks.
A half-dozen European banks have already settled criminal or
civil claims tied to Libor rigging, but Citi is the first U.S. bank
to do so.
Last May, five global banks including Citi and J.P. Morgan Chase
& Co. agreed to pay more than $5 billion to resolve probes into
whether traders colluded to move foreign currency rates for their
own benefit.
The CFTC on Wednesday also accused Citi of falsely reporting
rates used to determine U.S. dollar Libor during the 2008 financial
crisis to protect its reputation. The bank neither admitted nor
denied the agency's findings.
ISDAfix is a financial benchmark used to calculate a wide range
of interest-rate products. Firms ranging from hedge funds to
manufacturing companies pay a premium for trades designed to
protect against fluctuation in interest rates, and those swaps are
settled using the ISDAfix rate.
Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com
(END) Dow Jones Newswires
May 25, 2016 09:43 ET (13:43 GMT)
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