Barclays agrees to pay $100 million in nationwide settlement

By Michael Virtanen, The Associated Press

news@abc6.com

Barclays Bank has agreed to pay $100 million to 43 states on Monday, including Rhode Island, to settle allegations that the bank improperly set interest rates almost a decade ago, affecting payments on investments.

The settlement includes $93.5 million in restitution, as well as costs of the investigation led by the New York and Connecticut attorneys general.

Authorities said that during the global financial crisis from 2007 to 2009 the British bank lowered rates to make it look like Barclays was not in financial trouble, and from 2005 to 2009 Barclays traders requested rates to benefit their trading positions.

Eric Schneiderman, New York Attorney General said Barclays is the first of several banks under investigation by the states to resolve claims.

A panel of 16 banks made submissions that were supposed to reflect borrowing rates for the London Interbank Offered Rate for the U.S. dollar.

"There has to be one set of rules for everyone, no matter how rich or how powerful, and that includes big banks and other financial institutions that engage in fraud or impair the fair functioning of financial markets," Schneiderman said.

Government entities and nonprofits in New York and across the U.S. were among those who were swindled out of millions of dollars when they entered into swaps and other financial contracts with Barclays, according to Schneiderman’s office.

Investigations are continuing into the actions of several other banks.

Barclays said it’s content to resolve the investigation into legacy LIBOR and Euro Interbank Offered Rate activities.

Spokesman Andy Smith said, "We believe this settlement is in the best interests of our shareholders and clients, and allows us to continue to focus on the future and serve our clients."

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