Barclays to pay more than $450 million in settlements

Sums will be paid to U.S. and British authorities to resolve LIBOR and EURIBOR manipulation probe

Perhaps the ink will dry on Barclays’ checks just in time for its execs to find their seats at Centre Court and dig into bowls of strawberries and cream. Reports surfaced today that the British bank will pay about $450 million to U.S. and British authorities to settle charges against Barclays PLC, Barclays Bank PLC and Barclays Capital Inc.

Barclays agreed to settle with the U.S. Commodity Futures Trading Commission (CFTC), the U.S. Department of Justice (DOJ) and the U.K.'s Financial Services Authority (FSA) over allegations of attempting to manipulate and making false reports concerning global benchmark interest rates, LIBOR and EURIBOR.

The authorities say that Barclays’ misconduct violated a number of requirements, involved a significant number of employees and occurred frequently—sometimes daily—over a four-year period beginning as early as 2005. Barclays acknowledged in March that it was working on a possible deal with regulators as well as investigating potential enforcement proceedings.

The FSA says Barclays’ misconduct included:

  • Making submissions that formed part of the LIBOR and EURIBOR setting process that took into account requests from Barclays’ interest rate derivatives traders, who were motivated by profit and sought to benefit the bank’s trading positions
  • Seeking to influence the EURIBOR submissions of other banks contributing to the rate setting process
  • Reducing its LIBOR submissions during the financial crisis as a result of senior management’s concerns over negative media comment

“Barclays’ misconduct was serious, widespread and extended over a number of years,” Tracey McDermott, the FSA’s acting director of enforcement and financial crime, said in a statement. “Firms making submissions must not use those submissions as tools to promote their own interests.”

According to the settlements, Barclays will pay the CFTC $200 million, the DOJ $160 million and the FSA $92.8 million. The fine imposed by the CFTC is said to be the largest civil monetary penalty ever levied.

“The American public and our markets rely upon the integrity of benchmark interest rates like LIBOR and Euribor because they form the basis for hundreds of trillions of dollars of transactions and affect nearly every corner of the global economy,” David Meister, the CFTC’s director of enforcement, said in a statement. “Banks that contribute information to those benchmarks must do so honestly. When a bank acts in its own self-interest by attempting to manipulate these rates for profit, or by submitting false reports that result from senior management orders to lower submissions to guard the bank’s reputation, the integrity of benchmark interest rates is undermined.”

Assistant Attorney General Lanny Breuer, however, noted that the bank was obliging with the investigation.

“To the bank’s credit, Barclays also took a significant step toward accepting responsibility for its conduct by being the first institution to provide extensive and meaningful cooperation to the government,” he said in a statement. “Its efforts have substantially assisted the Criminal Division in our ongoing investigation of individuals and other financial institutions in this matter.”

For more on Barclays settlement, read Reuters.

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