Barclays To Pay Nearly $450 Million To Settle Rate Manipulation Claims

Barclays To Pay Nearly $450 Million To Settle Rate Manipulation Claims

WASHINGTON, D.C. - The U.S. Commodity Futures Trading Commission (CFTC) yesterday announced that it had filed and settled charges against Barclays PLC, Barclays Bank PLC and Barclays Capital Inc. (collectively, Barclays) over Barclays' attempted manipulation and issuance of false reports regarding two global benchmark interest rates over a four-year period, beginning as early as 2005.

According to a press release announcing the settlement, Barclays has agreed to pay a $200 million civil monetary penalty to settle the CFTC's charges and has agreed to implement "measures to ensure that its [London Interbank Offered Rate (LIBOR) and Euribor] submissions are transaction-focused, based upon a rigorous and honest assessment of information and not influenced by conflicts of interests."

According to the press release, "Barclays, through its traders and employees responsible for determining the Bank's LIBOR and Euribor submissions (submitters), attempted to manipulate and made false reports concerning both benchmark interest rates to benefit the Bank's derivatives trading positions by either increasing its profits or minimizing its losses.  This conduct occurred regularly and was pervasive.  In addition, the attempts to manipulate included Barclays' traders asking other banks to assist in manipulating Euribor, as well as Barclays aiding attempts by other banks to manipulate U.S. Dollar LIBOR and Euribor."

"The Order also finds that throughout the global financial crisis in late August 2007 through early 2009, as a result of instructions from Barclays' senior management, the Bank routinely made artificially low LIBOR submissions to protect Barclays' reputation from negative market and media perceptions concerning Barclays' financial condition."

Other Penalties

According to the press release, Barclays also reached an agreement with the Fraud Section of the U.S. Department of Justice's Criminal Division and will pay a $160 million penalty and continue to cooperate with the Justice Department. 

Moreover, according to the press release, the United Kingdom's Financial Services Authority imposed a penalty of £59.5 million and issued a final notice regarding its enforcement action against Barclays.

The press release is available online at the CFTC's website at www.cftc.gov/PressRoom/PressReleases/pr6289-12.

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