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UK banking giants face fresh LIBOR probe

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16/08/2012
Seven leading global banks, including Barclays, RBS and HSBC, have been issued with subpoenas by the state of New York over the alleged rigging of LIBOR.

New York attorney general Eric Schneiderman has sent subpoenas to Barclays, RBS, HSBC, JPMorgan Chase, Citigroup, UBS and Deutsche Bank, according to the Financial Times, Bloomberg and other agencies.

The demand for documents and communications centres on whether banks colluded to fix interest rates determined by LIBOR, consequently damaging borrowers and investors. It follows separate probes from other regulators in the US, UK and other territories.

The UK’s Serious Fraud Office, for instance, said last month it is launching a criminal investigation into the alleged manipulation.

But the New York probe may differ in that, under state law, Schneiderman is able to bring cases without having to show the accused intended to commit fraud, according to the FT.

A spokeswoman for Connecticut attorney general George Jepsen, who is working with Schneiderman on the latest investigation, said last month the pair intend to provide restitution to state agencies, municipalities and others who may have been harmed by any illegal conduct.

The probe represents a new phase in a scandal that came to global prominence in June when Barclays was fined a combined £290m by US and UK regulators to settle allegations it attempted to rig the interbank rate.

The bank’s CEO, Bob Diamond, was one of several leading Barclays executives who resigned in the aftermath of the fine amid growing political scrutiny.

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