Illinois part of $100 million fraud settlement with Barclays
Attorney General Lisa Madigan announced a $100 million settlement with Barclays on Monday following an investigation into fraudulent manipulation of interest rates.
Barclays Bank PLC and Barclays Capital Inc. manipulated LIBOR, a benchmark interest rate that affects financial instruments worth trillions of dollars and has a widespread impact on global markets and consumers, according to a statement from Madigan’s office.
An investigation conducted by 43 states and Washington D.C. revealed Barclays and other banks on the U.S. dollar-LIBOR-setting panel were colluding to manipulate rates, prosecutors said.
As a result, government entities and nonprofits in Illinois and across the country were defrauded when they entered into swaps and other investment instruments with Barclays.
“This is another example of Wall Street seeking to profit by defrauding others,” Madigan said in the statement. “Any company that defrauds governments and nonprofit organizations out of scarce dollars to pad their own profits must be held accountable.”
Government entities and nonprofits that entered into LIBOR-linked swaps and other investment contracts with Barclays between 2005 and 2010 will be notified if they are eligible to receive restitution from the $93.5 million settlement fund, prosecutors said.
The rest of the money will be used to pay costs of the investigation.
Barclays was the first of several banks on the panel to resolve claims against it, prosecutors said. The investigation into other U.S. dollar-LIBOR setting banks is ongoing.