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MONTH-IN-BRIEF (Jun 2018)

Banking Law

Citibank and Coalition of 42 Attorneys General Settle LIBOR Action For $100 Million

By Buckley Sandler LLP

On June 15, 2018, the New York Attorney General, along with 41 other state Attorneys General, announced a $100 million settlement with Citibank for allegedly fraudulent conduct involving U.S. Dollar LIBOR. According to the settlement agreement, the bank “misrepresented the integrity of the LIBOR benchmark” to government and private institutional counterparties. The bank allegedly concealed, misrepresented, or failed to disclose information to “avoid negative publicity and protect the reputation of the bank,” including, among other things, asking employees in other sections of the bank to avoid offering higher rates than the bank’s USD LIBOR submissions. Additionally, contributing to inaccurate LIBOR benchmark rates, Citibank allegedly was aware that other financial institutions made USD LIBOR submissions that were inconsistent with their borrowing rates. The bank is required to pay $95 million into a settlement fund, which government and nonprofit entities with LIBOR-linked investments from the bank may be eligible for distribution, while the remaining $5 million will cover costs and fees associated with the investigation and settlement.

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