CHARLESTON — West Virginia Attorney General Patrick Morrisey announced a multistate settlement of $100 million with Citibank to resolve allegations of fraudulent conduct involving the manipulation of LIBOR, a benchmark interest rate that affects investments and has a widespread impact on global markets and consumers.
The AG's office says the bank’s conduct allegedly defrauded government entities and not-for-profit organizations of millions of dollars. Across the nation these groups entered into investments with Citibank without knowledge of the alleged conduct.
“Banks and financial institutions must adhere to the rule of law,” Morrisey said. “Any fraudulent manipulation of its markets and rates affects consumers across the state and nation, including entities that rely upon taxpayer funds and donated gifts. Such conduct cannot be tolerated.”
The investigation, conducted by a working group of 42 state attorneys general, revealed efforts to manipulate the benchmark interest rate with inaccurate data and improper communications, all in an attempt to benefit Citibank's trading position.
The states believe these actions misrepresented borrowing rates and the actual borrowing costs of Citibank.
Governmental and not-for-profit entities with LIBOR-linked swaps and other investment contracts with Citibank will be notified if they are eligible to receive a distribution from the settlement.
West Virginia joined the settlement with 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, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington and Wisconsin.