By Joe Vladeck

The dust has yet to fully settle in the wake of the LIBOR-fixing brouhaha, which has implicated virtually all of the world's largest financial institutions.  Yet financial regulators in the United Kingdom, Switzerland, and the United States are investigating yet another potential scandal: attempts to rig the $5 trillion international currency market.  The U.K Financial Conduct Authority, the U.S. Federal Bureau of Investigation, and the Swiss market regulator have all requested documents from institutions such as JPMorgan Chase and RBS that may show the banks colluded to set the daily currency "fixes" used to value portfolios of currency holdings. 

The Wall Street Journal has the details, and suggests that this sort of manipulation has long been a concern of investors.

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October 16, 2013

By Joe Vladeck

The National Credit Union Administration (NCUA) is the latest regulatory body to pursue sanctions against some of the world's largest financial institutions for allegedly manipulating LIBOR, a.k.a. the London Interbank Offered Rate.  LIBOR is a commonly used benchmark interest rate used to price trillions of dollars of financial products, ranging from credit cards and mortgages sold to the public to complicated bespoke derivative securities sold from one financial institution to another.  

The NCUA is alleging that its member credit unions lost investment income as a result of the interest rate manipulations.  The lawsuit, National Credit Union Administration Board v. Credit Suisse Group AG, names some of the world's largest banks, including JPMorgan Chase & Co, Barclays Plc, Societe General SA, and the Royal Bank of Canada.  This suit is the latest action in a fusillade of litigation and regulatory actions taken against the banks, which has drawn mixed results thus far.  Over the summer, Barclays, UBS, and RBS settled with U.S. and European regulators, agreeing to pay fines exceeding $2.5 billion.  But a series of earlier lawsuits, many of which brought claims under U.S. racketeering statutes, were dismissed this past Spring.

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October 15, 2013