Citigroup to pay 425 million USD to settle benchmark manipulation charges

The Citigroup will pay a total of 425 million U.S. dollars to settle charges that it attempted to manipulate global interest rate benchmarks multiple times from 2007 to 2012, the U.S. Commodity Futures Trading Commission (CFTC) announced Wednesday.

The CFTC announced two penalties in two separate statements detailing charges against the

multinational financial services company and several of its affiliates.

The Citigroup will pay 250 million dollars to resolve allegations for attempted manipulation of the U.S. Dollar International Swaps and Derivatives Association Fix (USD ISDAFIX), a global benchmark for interest rate products, the CFTC said.

In a second case, the CFTC fined the Citigroup 175 million dollars for alleged abuses of the London Interbank Offered Rate (LIBOR) and the Euroyen Tokyo Interbank Offered Rate (Euroyen TIBOR) benchmarks.

Citigroup was also charged with false reporting of U.S. Dollar LIBOR at times to "avoid generating negative media attention and to protect its reputation" during the financial crisis from the spring of 2008 through the summer of 2009, according to the CFTC.

"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.

Citigroup said in a statement that these settlements "represent a significant step for Citi in resolving its legacy benchmark rate investigations."

"In addition to adopting industry-wide reforms related to participation in benchmark rates, Citi has made substantial investments in its systems, controls and monitoring processes to better guard against inappropriate behavior," the bank said.

With Wednesday's settlements with Citigroup, the CFTC has imposed penalties of over 5.08 billion dollars in its investigation of manipulation of global benchmark rates. Endit