US: Deutsche Bank Agrees to US$220M settlement in LIBOR suit

Deutsche Bank has agreed to a US$220 million, 45-state settlement over its role in the manipulation of the benchmark London Interbank Offered Rate (LIBOR), New York Attorney General Eric Schneiderman’s office announced Wednesday, October 25.

“We will not tolerate fraudulent, manipulative or collusive conduct that interferes with or undermines confidence in our financial markets. Large financial institutions, like all other market participants, have to abide by the rules,” Schneiderman said in a statement.

Deutsche, along with more than a dozen other banks, helped set the interest rates for trading of the US dollar and other currencies. The interest rate affects trillions of dollars worth of financial instruments.

From 2005 through the global financial crisis, investigators say they found the bank unlawfully defrauded counterparties by failing to disclose it had made false or misleading LIBOR price submissions, had traders who attempted to influence other banks’ traders to benefit Deutsche’s position, and was aware that submissions were being falsified by other banks as well.

According to Schneiderman, the manipulation defrauded government entities and not-for-profits of funds “that otherwise could have been used to benefit New Yorkers.” These entities entered into swaps and other financial contracts with Deutsche not knowing the interest rate on the dollar was being manipulated.

Full Content: Bloomberg

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