The attorneys general of New York and Connecticut have issued subpoenas to seven banks over the possible manipulation of a global interest rate, a person with knowledge of the matter told The Associated Press on Wednesday.
Subpoenas were issued, mostly last month and this month, to Barclays, Citigroup, Deutsche Bank, JPMorgan Chase, HSBC, Royal Bank of Scotland and UBS, the person said.
The person spoke on condition of anonymity because the person was not authorized to discuss the matter publicly.
US and British regulators have already fined Barclays, based in Britain, US$453 million for submitting false information between 2005 and 2009 to keep the interest rate, known as LIBOR, low.
LIBOR, short for London interbank offered rate, is used to set the interest rates on trillions of dollars in contracts around the world, including mortgages and credit cards.
It is a self-policing system and relies on information that global banks submit to a British banking authority.
The New York and Connecticut attorneys general issued the subpoenas because LIBOR is also used to determine the rates for the bonds issued by city and county governments, the person with knowledge of the matter told AP.
Barclays has admitted that it submitted figures that were lower than accurate for its interbank borrowing, including during the financial crisis in the fall of 2008. Those reports made it appear that Barclays was healthier than it was.
UBS filed a report with regulators on July 31 saying that agencies — including state attorneys general — were examining whether it and other banks had tried to manipulate the rate.
Separately, Standard Chartered is pursuing a collective settlement with other US authorities after agreeing to pay US$340 million to New York’s financial regulator under mounting pressure from shareholders.
The bank said it made a “pragmatic decision” to settle after having seen its share price slump by more than 30 percent at one stage last week, following accusations that it concealed Iran-linked transactions worth a total of US$250 billion.
The transactions were at the center of a fresh legal challenge on Wednesday when the estates of victims of the 1983 bombing of US Marine barracks sued the bank. The suit claimed the transactions were part of Iran’s efforts to avoid judgements against it over the bombing.
With the New York settlement agreed, subject to formalities, the bank’s US lawyers at Sullivan & Cromwell will look to accelerate talks with other US agencies to enable Standard Chartered to draw a line under an episode that has caused lasting damage to its reputation.
“Negotiations are going on between the other agencies, and we are talking to them. It is safe to assume we are now seeking a collective agreement with the other agencies,” a spokesman for the bank said on Wednesday, declining to put a time frame on the process.
Having cut short a family vacation in Canada last week, CEO Peter Sands is now pushing for a comprehensive deal that removes lingering uncertainty. The bank is still the subject of probes by the US Treasury, the Federal Reserve, the Justice Department and New York prosecutors.