JP Morgan office
Subpoenas were sent in recent weeks to five of the banks, Deutsche Bank AG (DBK), Royal Bank of Scotland Group Plc and HSBC Holdings Plc (HSBA) in addition to JPMorgan and Barclays, the person said Wednesday. Citigroup Inc. (C) and UBS AG (UBSN) received subpoenas earlier this year as part of the investigation.
New York Attorney General Eric Schneiderman and Connecticut Attorney General George Jepsen are jointly investigating alleged manipulation of the London interbank offered rate by lenders. RBS, UBS, Lloyds Banking Group Plc (LLOY) and Deutsche Bank are among the lenders regulators in Europe, Asia and the U.S. are investigating. The U.S. is conducting a criminal investigation.
Confidence in Libor, a benchmark for financial products valued at $360 trillion worldwide, has been dented by Barclays’s admission that it submitted false London and euro interbank offered rates. Robert Diamond resigned as Barclays’ chief executive after the bank was fined 290 million pounds ($454 million).
Derivatives traders requested the false submissions in the Libor and Euribor setting process, as they were “motivated by profit and sought to benefit Barclays’ trading positions,” the U.K. Financial Services Authority said.
According to Bloomberg, the investigation by Schneiderman and Jepsen could broaden to include additional banks, said the person.
Jennifer Givner, a spokeswoman for Schneiderman, and Jaclyn Falkowski, a spokeswoman for Jepsen, declined to comment on the subpoenas.
Sarah Binnie, a spokeswoman for Edinburgh-based RBS, said the bank continues to receive requests from various regulators investigating the setting of Libor and other interest rates. The lender is cooperating with the investigations and “keeping relevant regulators informed,” she said in e-mail.
“It is not possible to estimate with any certainty what effect these investigations and any related developments may have on the group,” Binnie said.