The U.S. Justice Department is building criminal cases against several financial institutions and their employees related to the manipulation of interest rates, The New York Times reported on Saturday.
Citing government officials close to the case who spoke on
condition of anonymity, the Times said traders at Barclays Plc
were among the individuals against whom Justice was
building cases. Authorities expect to file charges against at
least one bank later this year, the newspaper reported.
Investigators in Washington and London last month struck a
$450 million 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 Times said cities, states and
municipalities in the United States were also trying to
determine whether they suffered loses due to rate manipulation
and some had filed suit.
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 Times
reported, 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, the newspaper said.
Still, the investigation is unusually complex, could
continue for years and end in settlements rather than
indictments, the Times said, citing officials close to the case.
