Citibank added $175 million to its LIBOR-fixing legal bills after agreeing to settle charges with the Commodity Futures Trading Commission (CFTC).
The bank was also fined $250 million by the regulator for manipulating an interest rate indicator called ISDAFix between 2007-2012. The two regularly-published gauges are used to price financial commodities around the world.
LIBOR, the London Inter-Bank Offering Rate, is what banks charge each other for short-term loans. It influences the cost of over $300 trillion in financial services.
Citibank, in one instance, fudged the benchmark for months “to avoid generating negative media attention and to protect its reputation during the financial crisis,” the CFTC noted Wednesday.
ISDAFix, meanwhile, helps determine “payout rates on pension funds and determining the cost of real-estate loans,” according to The Wall Street Journal.
Citibank traders bragged that the rate was “suprising[ly] easy to push,” the CFTC found. Manipulating the gauge involved traders bidding for assets, including US Treasury bonds.
The move comes just days after an appellate court in Manhattan reversed a federal judge’s decision in 2013 to dismiss a civil antitrust suit against 16 banks involved in LIBOR manipulation.
In its opinion, the court evinced doubt plaintiffs would be able to prove they were harmed by the banks.
“It seems strange that this or that bank (or any bank) would conspire to gain, as a borrower, profits that would be offset by a parity of losses it would suffer as a lender,” wrote Judge Dennis Jacobs.
The court also noted that ultimately finding in favor of the plaintiffs could “bankrupt 16 of the world’s most important financial institutions.” Citibank is listed in the suit among defendants.
The Justice Department has opened criminal cases against five banks. In May 2015, Citibank was told it wouldn’t be charged.
Regulators in the US and Europe have already fined Citibank, JP Morgan, Royal Bank of Scotland, UBS and Barclays for their roles in the LIBOR-fixing conspiracy. The Justice Department and the Federal Reserve had doled out $5.6 billion in penalties to the banks as of last spring.
