Attorney General Becerra Announces $100 Million Multistate Settlement Against Citibank for Manipulating Key Interest Rate

SACRAMENTO – Joining a coalition of 42 Attorneys General, California Attorney General Xavier Becerra today announced a $100 million multistate settlement against Citibank for fraudulent conduct involving the manipulation of the London Interbank Offered Rate (LIBOR). LIBOR is the rate at which banks lend money to one another and is a key financial tool that determines interest rates for many financing products, including government and corporate bonds.

During the financial crisis, large international banks manipulated LIBOR to enhance their financial health, avoid negative publicity, and minimize harm to their reputations. Instead of submitting rates that reflected Citibank’s true borrowing cost, Citibank repeatedly and intentionally made false submissions. This unlawful strategy resulted in losses to many who invested with Citibank in LIBOR-linked financial instruments. The settlement announced today will return over $12 million to California governmental and non-profit entities that suffered because of Citibank’s conduct.

“California is prepared to hold accountable any financial institution that plays fast and loose with the law. Fraudulent and manipulative conduct will not be tolerated,” said Attorney General Becerra. “As a result of this settlement, Californians will have more money for hospitals, water districts, local transit and other public services -- money that would have otherwise lined undeserving pockets.”

California serves on the Executive Committee of the LIBOR Multistate action, which began investigating LIBOR misconduct in 2012. Including past settlements with Barclays ($100 million) and Deutshe Bank ($220 million), the Multistate has now recovered $420 million for governmental and non-profit entities that lost money on LIBOR-linked investments.

The LIBOR Multistate also includes the Attorneys General of New York, Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, District of Columbia, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, Washington, West Virginia, and Wisconsin.

A copy of the settlement agreement is attached to the electronic version of this release at oag.ca.gov/news.