By Daily Mail Reporter


The investigation into the LIBOR interest rate-rigging scandal is widening as the U.S. Justice Department is expected to file criminal charges against individual employees and at least one bank later this year.

As well as building cases against several banks, the department’s criminal division is also targeting individuals at the center of the scandal, including traders at Barclays, according to government officials who spoke anonymously to The New York Times.

In a global investigation, authorities are examining whether financial firms fraudulently manipulated interest rates to improve their profits and appear healthier than they were. 


Criminal investigation: The Justice Department is working to file criminal charges against banks and individual employees at the centre of the LIBOR interest rate-rigging scandal (file photo)

Last month British bank Barclays was fined $453 million after admitting to influencing the LIBOR (London Interbank Offered Rate).

Despite being set in London, the LIBOR is the average interest rate agreed by the world's largest international banks and indexes the short and long term interest rates for 10 currencies across 15 different time zones.

The LIBOR impacts every financial service and product across the planet and in the U.S. in 2008, 60 percent of prime adjustable rate mortgages and almost all of sub-prime mortgages were tied to LIBOR.

However, the $453 million settlement does not protect Barclays employees from criminal prosecution.

With the prospect of possible criminal charges, several financial institutions, including at least two European firms, are scrambling to arrange deals with the government, the Times reported, citing lawyers close to the case.

Given the broad scope of the Libor case and the number of institutions thought to be involved, the investigations could provide authorities with a 'signature moment' to hold big banks accountable for misdeeds during the financial crisis, which hit global markets from late 2007, the newspaper said.

While the Commodity Futures Trading Commission’s regulatory inquiry could lead to fines and an overhaul of how banks are internally controlled the Justice Department’s investigation could result in criminal fraud cases against individual employees. If found guilty, they could face jail.


Settlements: Faced with potential criminal lawsuits, several banks are working to arrange settlements, lawyers close to the case said

It has been alleged that the world's largest banks have been fraudulently fixing interest rates around the world for at least the past decade, if not for a much longer period of time.

The fraud was uncovered when Barclay's Bank in London was discovered to have been submitting false figures to the LIBOR to improve their trading position.

By manipulating the LIBOR, by raising or lowering it, banks allegedly could make their balance sheets appear healthier than they were, while consumers and members of the public apparently paid the shortfall.


Warning sign: In June British bank Barclays was fined $453 million after admitting to influencing the LIBOR

Although it is not clear which institutions the Justice Department is tackling next, The New York Times reported that the Swiss bank UBS is lined up to be targeted for regulatory action.

UBS has already made an immunity deal with one division of the Justice Department, potentially shielding the bank from criminal prosecution, reported the newspaper.

Furthermore, cities and states have begun to sue some of the world's largest banks as the LIBOR scandal continues to spread across the globe.

The prospect of criminal cases may trigger institutions into seeking settlements and end there rather then indictments, according to officials close to the case.

As the global investigation continues, Justice Department authorities are being hampered by a lack of access to documents from big banks abroad which they are struggling to gain permission to.

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The comments below have not been moderated.

So are we about to discover that all the commodity markets are made up, savings interest has been fixed artificially low and all the insurance markets are rigged? The scale of Labour's Enron decade is unbelievable. All of their surviving politicians who were involved in the finances during their time in office need to be expelled from parliament immediately - and that means you too Balls!

Why are some people still holding the subprime crisis responsible for everything. Is it also responsible for the Tsunami in Japan last year? What does subprime have to do with Greece, Spain, and Ireland, property bubbles and wasting money on useless infrastructure projects. Get a grip, and a better education while you are at it.

The British tax payers bail out the banks so they can pay fines to the USA? Talk about getting shafted from all directions. When are you going to grow a pair, citizens of Britain, and say enough is enough?

And WHO is going to LOOK AT THE BANKS IN THE GOOD OLD USA... it all started there when all said and done.... Where are any of our TAX PAYERS MONEY IN FINES GOING......Stright into the USA coffers ?- bill p, france, 15/7/2012 19:18 X,,,,,,,,,,,If you stopped writing dumb comments and took the time to look you'll see the US justice dept is after US banks as well as British,German.Swiss and others,if guilty they'll end up in US jails with plenty of other bankers already there doing real time unlike soft touch Europe.As for the fines it was America who initiated the Barclay's case thats why the majority of fines go to America,Jesus you people are really lead up the garden path by these tame inquiries and a euro media.

Barclays were not discovered. They told the authorities and worse still the BOE and liebour ignored the warnings and either let or encouraged bARC to lower their submissions. In all this and the more you read BARC are the cleanest out there!!!!

In America the authorities are preparing to investigate and prosecute these rate fixers. In England the Government doesn't think and investigation is warranted, at least not by a proper panel. Wait a while and everything will go back as it has always been and many of these fixers will be rewarded with OBE s for................guess what............"SERVICES TO BANKING !!!

While Osborne and Dave are all talk, the US takes action. The POSH boys will look weak again. It might not just be Osborne looking for a new job after the summer but DC as well.

LOL...and which court can we take the US to for dragging us into pointless wars and printing worthless paper money to manipulate every commodity and transaction in the world? I guess the end of the US Dollar is near.

Glad I started investing in gold and silver decades ago and only getting paid in cash!! Come down on these so and so's like a ton of bricks and fine them billions!

And WHO is going to LOOK AT THE BANKS IN THE GOOD OLD USA... it all started there when all said and done.... Where are any of our TAX PAYERS MONEY IN FINES GOING......Stright into the USA coffers ?

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