The U.S. Commodity Futures Trading Commission (CFTC) issued an order on Monday July 25th, against Lloyds Banking Group PLC (ADR) (NYSE:LYG) (LON:LLOY) and Lloyds Bank plc, both bringing and settling charges relating to false reporting and attempted manipulation of the London Interbank Offered Rate (LIBOR) for Sterling, U.S. Dollar and Yen committed by employees of the bank. The order determined that Lloyds successfully manipulated the Sterling LIBOR and Yen LIBOR on several occasions. Furthermore, the CFTC also brought and settled charges that Lloyds employees assisted the attempts of derivatives traders at Rabobank to manipulate Yen LIBOR.
Today’s order requires Lloyds Banking Group PLC (ADR) (NYSE:LYG) (LON:LLOY) and Lloyds Bank to disgorge a $105 million civil monetary penalty, cease from further violations of the law, and to adhere to specific oversight plan to guarantee the integrity of LIBOR rate setting in the future.
Moreover, the CFTC officially recognized the cooperation of Lloyds Banking Group and Lloyds Bank in the investigation.
The CFTC also notes in its statement that it has settled with financial institutions for more than $1.87 billion for manipulative conduct with regard to LIBOR and other benchmark interest rates.
Statement from CFTC regarding Lloyds Bank
“By today’s action, Lloyds is being held accountable for serious misconduct,” admonished Aitan Goelman, CFTC Director of Enforcement in the press release. “The CFTC remains committed to taking all actions necessary to ensure the integrity of the markets we oversee.”
Other legal actions related to Lloyds Bank LIBOR rigging
The CFTC isn’t the only one making a deal with Lloyds Banking Group PLC (ADR) (NYSE:LYG) (LON:LLOY). In a related action, the U.S. Department of Justice (DOJ) also made a deferred prosecution agreement with Lloyds Banking Group, holding off on criminal charges in return for Lloyds continuing to cooperate and coughing up an $86 million penalty. Furthermore, the United Kingdom Financial Conduct Authority issued a Final Notice on its enforcement action against Lloyds Bank and Bank of Scotland plc and also imposed a penalty of £105 million (around $179 million).