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Libor rate-riggers could face jail as investigations continue

September 2012

Bankers found guilty in the Libor rate-rigging scandal could face jail terms after the UK’s Serious Fraud Office (SFO) confirmed that existing legislation gives them the power to bring criminal actions against banks and individuals. 
 
The SFO announced a formal investigation into the offences in July after chancellor George Osborne confirmed that the Financial Services Authority was not able to impose criminal sanctions for the manipulation of the benchmark Libor and Euribor inter-bank lending rates (EP, July 2012, p1). Several UK financial institutions are likely to be the subject of investigation.
 
In the US, seven banks – among them HSBC and Royal Bank of Scotland (RBS) – have been ordered to appear before the attorney general of New York and Connecticut to be questioned about alleged manipulation of the Libor rate. 
 
US regulators are investigating potential involvement by other banks and will also question Barclays, Citigroup, Deutsche Bank, JP Morgan and UBS.
 
Meanwhile, a group of 21 banks including Barclays, Bank of America and Citigroup are facing a lawsuit from New York’s Berkshire Bank over the alleged manipulation of Libor. 
 
Berkshire’s lawyers at US litigation firm Pomerantz Haudek Grossman & Gross have filed a complaint on behalf of all New York financial institutions that ‘originated, purchased outright or purchased a participation in’ loans paying interest rates pegged to Libor, seeking compensatory damages.



Serious Fraud Office | UK & NI Ireland | Scandals

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