Justice department building criminal cases against bank and employees linked to rate manipulation, says New York Times
American regulators may press charges against Barclays bank and some of its employs over the Libor interest rate manipulation scandal, according to a report.
The US justice department is building criminal cases against several financial institutions and their employees related to the manipulation of inter-bank lending rates, the New York Times reported on Saturday.
Citing government officials close to the case, the New York Times said traders at Barclays Plc were among the individuals against whom the department was building cases. Authorities expected to file charges against at least one bank later this year, the newspaper reported.
Investigators in Washington and London last month struck a $450m (£289m) settlement with Barclays in a rate-rigging case but the deal does not shield Barclays employees from criminal prosecution. The criminal and civil investigations have focused on how banks set the London interbank offered rate, or Libor.
Libor is used to determine borrowing casts for trillions of dollars in financial products, including mortgages, credit cards and student loans. The New York Times said cities, states and municipalities in the US were also trying to determine whether they suffered loses due to rate manipulation, and some had filed lawsuits.
With the prospect of possible criminal charges, several financial institutions, including at least two European firms, are scrambling to arrange deals with the government, the New York Times said, citing lawyers close to the case.
Given the broad scope of the Libor case and the number of institutions thought to be involved, the investigations could provide authorities with a "signature moment" to hold big banks accountable for misdeeds during the financial crisis, which hit global markets from late 2007, it said, adding that the investigation could take years and end in financial settlements rather than charges.
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