June 15, 2018

CT shares in $100M LIBOR settlement

Connecticut and 41 other states will share in a $100 million restitution settlement with New York's Citibank over allegations that one of the nation's largest lenders manipulated a key interest rate ahead of and during the 2008 global financial crisis, authorities say.

State Attorney General George P. Jepsen on Friday jointly announced the settlement, of which his office says $400,000 is Connecticut's share. Details for allocating the money among affected state agencies, municipalities and nonprofits are being worked out, a Jepsen spokesperson said.

Citi, he and other states' attorneys general said, agreed to settle allegations that it manipulated the London Interbank Offer Rate (LIBOR), and misrepresented the integrity of LIBOR at various times in 2008 and 2009.

Citi, among the world's largest banks with assets of $1.4 trillion, is the third of several LIBOR-setting banks under investigation by state attorneys general to resolve the claims against it. The others are Britain's Barclays Bank and Germany's Deutsche Bank.

"Our investigation has developed significant evidence that some banks, like Citibank, that were responsible for setting LIBOR rates intentionally manipulated LIBOR in order to protect their public image and to help the business side of their operations be more profitable," Jepsen said.

With the Citi settlement, the states have collected $420 million from three banks, almost all of which will be distributed to state and local government entities and nonprofits that have been harmed by the banks' conduct.

The multistate working group of 42 states, led by the attorneys general of Connecticut, California, Florida, Illinois, Massachusetts, Maryland, New Jersey and New York, includes the attorneys general from Alabama, Alaska, Arizona, Arkansas, Colorado, Delaware, the District of Columbia, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, West Virginia and Wisconsin.

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