Nebraska has reached a $100 million settlement with Citibank for fraudulent conduct regarding a benchmark interest rate.
A working group of 42 state Attorneys General investigated how Citibank handled the U.S. Dollar LIBOR, which has a widespread impact on financial markets. The group alleged Citibank misrepresented the integrity of the LIBOR benchmark to state and local governments, non-profit groups, private businesses, and institutional traders. It claims Citibank made LIBOR submissions to avoid negative publicity and protect its reputation, that its LIBOR submitters colluded with others at the bank to keep them from offering higher rates, and that it claimed other banks made LIBOR submissions inconsistent with their borrowing rates which contributed to inaccurate LIBORs.
The group alleges Citibank made millions when entities entered into financial contracts with the bank without knowing it was manipulating LIBOR submissions.
Of the settlement, $95 million is set aside to make restitution with the remainder paying for the investigation.
The AG office reports Citibank is the third of several USD-LIBOR-setting panel banks under investigation by the state Attorneys General to resolve the claims against it
Other states joining Nebraska in the Citibank settlement include: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nevada, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, West Virginia and Wisconsin. New York led the working group of State Attorneys General investigating Citibank. The investigation into the conduct of other USD LIBOR-setting panel banks is ongoing.