New YorK / AFP
Citigroup and affiliates were fined $425 million over charges they attempted to manipulate Libor and other leading financial benchmarks, US regulators have announced.
Citigroup, which was supposed to submit data on actual transactions to help set the internationally-used benchmarks, instead gave false information to benefit its trading positions, according to the cases.
In one of the two cases, Citigroup was ordered to pay a $175 million penalty after regulators determined that Citigroup’s Japanese units and its traders attempted to manipulate the yen London Interbank Offered Rate, or Libor, in 2010, the Commodities Futures Trading Commission said.
The CFTC said a Japanese derivatives trader with Citigroup influenced contacts at other leading banksto make submissions that would benefit his trading positions. Also, a senior manager in the same company pressured other Citigroup officials to adjust rate submissions for another benchmark, Euroyen Tokyo Interbank Offered Rate, to benefit the senior manager’s trading positions. The CFTC also faulted Citigroup for false submissions in connection with US dollar Libor.
in 2008 and 2009, a period when Citigroup sometimes bought financing at above-market rates after it received US government bailout funds.
Citigroup officials made false reports “at times to avoid generating negative media attention and to protect its reputation during the financial crisis,” the CFTC said.
In a second case, the CFTC fined Citigroup $250 million for making false submissions in an attempt to manipulate the US Dollar International Swaps and Derivatives Association Fix, or ISDAFIX.
CFTC director of enforcement Aitan Goelman said the agency’s enforcement aims to “ensure the integrity of global benchmarks” and that it will crack down on an institution if “it acts to undermine a benchmark for its personal profit or benefit.”
With the latest cases involving Citigroup, the CFTC said it had amassed about $5.1 billion in penalties in 17 actions against banks and brokers for abuses in Libor, ISDAFIX and foreign exchange.