SALT LAKE CITY, UT – Utah Attorney General Sean Reyes Friday announced a $100 million settlement with Citibank for fraudulent conduct involving U.S. Dollar (USD) LIBOR, which is a benchmark interest rate that affects financial instruments worth trillions of dollars and has a widespread impact on global markets and consumers. The investigation was conducted by a working group of 42 state Attorneys General offices, led by New York.
According to Assistant Attorney General Eddie Vasquez,
“Although LIBOR rates are calculated in London, they affect the interest rates that Utah consumers pay for many credit cards and variable rate mortgages, so keeping the LIBOR rate setting system honest is very important to our citizens.”
The Attorneys General alleged that Citibank misrepresented the integrity of the LIBOR benchmark to state and local governmental, not-for-profit, private, and institutional trading counterparties by concealing, misrepresenting, and failing to disclose that: (a) Citibank, at times, made USD LIBOR submissions to avoid negative publicity and protect the reputation of the bank; (b) Citibank’s USD LIBOR submitters, on occasion, asked Citibank personnel in other units of the bank to avoid offering higher rates than Citibank’s USD LIBOR submissions; and (c) Citibank expressed belief that other banks, at times, made USD LIBOR submissions that were inconsistent with their borrowing rates and contributed to inaccurate LIBORs.
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