- In Latest Market Rigging Settlement, Citi Fined $425MM For Manipulating Interest Rates
by Tyler Durden, www.zerohedge.com
Another day, another too-big-to-fail bank gets slapped on the wrist after being busted for blatant rigging of the market. The CFTC Order finds that, beginning in January 2007 and continuing through January 2012 (the Relevant Period), Citibank on multiple occasions attempted to manipulate, and made false reports concerning, the U.S. Dollar International Swaps and Derivatives Association Fix (USD ISDAFIX), a global benchmark for interest rate products. Notably, while a handful of European banks have already settled criminal or civil claims tied to Libor rigging, Citi is the first U.S. bank to do so.
The CFTC Order requires Citibank to pay a $250 million civil monetary penalty and to immediately cease and desist from further violations of the Commodity Exchange Act. Further, Citibank is required take specified steps to implement and strengthen its internal controls and procedures, including measures to detect and deter trading potentially intended to manipulate swap rates such as USD ISDAFIX and to ensure the integrity of interest-rate swap benchmarks.
“The CFTC’s order demonstrates that we will vigorously continue to investigate any efforts to manipulate financial benchmarks, and we will take action where possible to protect the integrity of these benchmarks,” said Aitan Goelman, the CFTC’s Director of Enforcement. Mr. Goelman further commented, “The terms of this settlement are intended to reflect all aspects of Citibank’s response to the investigation, including the evolving nature of its cooperation.”
Citibank’s Unlawful Conduct to Benefit Derivatives Positions