June 29, 2012 / 2:45 AM / 7 years ago

U.S. judge asks if Barclays' Libor deal affects 2010 settlement

(Reuters) - A U.S. judge ordered Barclays Plc and the U.S. Justice Department on Thursday to explain if the bank’s $453 million settlement of allegations it manipulated interest rates affects a 2010 settlement in a case involving alleged illegal dealings with banks in countries like Iran and Cuba.

The order came from U.S. District Judge Emmet Sullivan in Washington, D.C., who has been overseeing the separate $298 million settlement by Barclays of claims it violated U.S. trade sanctions. Sullivan gave both sides until July 11 to address his question.

The 2010 deferred prosecution agreement specifies that Barclays could become “subject to prosecution for any federal crimes of which the United States has knowledge.” Those include the alleged illegal transactions Barclays conducted for customers in Cuba, Iran and Sudan from 1995 to 2006.

The order came a day after Barclays agreed to settle claims it manipulated the London interbank offered rate, or Libor, brought by the U.S. Commodity Futures Trading Commission, the U.S. Department of Justice and the U.K.’s Financial Services Authority. The Justice Department’s investigation is ongoing.

On Thursday, Mark Lane, a spokesman for Barclays, declined comment. A Justice Department spokesperson could not be reached after normal U.S. business hours.

In August 2010, the Justice Department charged Barclays with violating the International Emergency Economic Powers Act and the Trading with the Enemy Act. Prosecutors agreed to defer prosecution as part of the $298 million settlement. Sullivan criticized the settlement at the time as a “sweetheart deal,” but he ultimately approved it.

In a status report filed May 30, prosecutors said the United States was “not aware that Barclays has committed any federal crime during the term” of the deferred prosecution agreement.

Reporting By Nate Raymond; Editing by Matt Driskill

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