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N.Y. state widens Libor probe

Oct. 27, 2012 at 11:04 AM   |   Comments

ALBANY, N.Y., Oct. 27 (UPI) -- New York State has issued nine more subpoenas in its investigation of manipulation of the London inter-bank offered rate, a source told CNNMoney.

The state sent subpoenas to Barclays, Citigroup, Deutsche Bank, HSBC, JPMorgan, Royal Bank of Scotland and UBS in mid-summer. The source said New York State Attorney General Eric Schneiderman in late August sent subpoenas to nine others -- including Bank of America, Credit Suisse, Societe Generale, Royal Bank of Canada, Rabobank, Norinchukin Bank, Lloyds Banking Group, Bank of Tokyo Mitsubishi UFJ and WestLB.

The Libor scandal became public in June, when regulators announced Barclays had agreed to pay $450 million for trying to manipulate the Libor for its own advantage.

The Libor is supposed to be the average interest rate that large banks charge each other for loans. Before the scandal, it had been compiled by the British Bankers Association.

Barclays was charged with first sending in fraudulent numbers to make the bank appear more healthy than it actually was during the financial crisis of 2008. After that, it was charged with tampering with the numbers at the behest of various bank divisions that were trying to ramp up profits on various deals.

The Libor is used as a benchmark to set rates for as much as $10 trillion in loans and $350 trillion in derivatives, CNNMoney said.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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