W.Va., 39 other states reach $68 million deal with UBS over interest rate benchmark

By Chris Dickerson | Dec 23, 2018

CHARLESTON — West Virginia Attorney General Patrick Morrisey has announced the state is part of a $68 million, 40-state settlement with UBS to resolve allegations of fraudulent conduct involving the manipulation of LIBOR, a benchmark interest rate that affects financial instruments worth trillions of dollars and has a far-reaching impact on global markets and consumers.

The amount West Virginia, or any of the states, will receive is unclear for now. The settlement was announced Dec. 21.

The states alleged UBS misrepresented the integrity of the LIBOR benchmark by concealing, misrepresenting, and failing to disclose that UBS at times made LIBOR submissions to avoid negative publicity, protect the reputation of the bank and benefit its derivative trading positions.

“Consumers and investors, large and small, depend upon banks to be honest and adhere to the rule of law,” Morrisey said. “We cannot stand for any hint of fraud that manipulates the rates and markets across the nation.” 

The alleged conduct led to UBS making millions in unjust gains when government entities and not-for-profit organizations entered into swaps and other financial instruments with UBS without knowing that UBS and other LIBOR-setting banks were manipulating their LIBOR submissions.

Pursuant to the settlement agreement, UBS will continue to cooperate with the states to help facilitate civil enforcement efforts, including the distribution of funds to victims. Governmental and not-for-profit entities with LIBOR-linked swaps and other financial instruments with UBS will be notified if they are eligible to receive a distribution from the settlement fund.

West Virginia joined the New York-led settlement with Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia, Washington and Wisconsin. 

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