NEW YORK (Reuters) - Citigroup Inc (C.N) agreed to pay $100 million to settle charges by most U.S. states that it defrauded government and nonprofit entities by manipulating Libor, an interest rate benchmark that underlies a wide range of consumer transactions.
The settlement with the third-largest U.S. bank was announced on Friday by New York State Attorney General Barbara Underwood, whose office has led a probe by 41 states and Washington, D.C. of rate rigging by several banks.
Citigroup did not admit or deny wrongdoing, and agreed to cooperate.
Banks have paid roughly $9 billion to settle Libor-rigging probes worldwide.
In a statement, New York-based Citigroup said it has adopted industrywide reforms intended to stop rate rigging, and “made substantial investments in its systems, controls and monitoring processes to better guard against inappropriate behavior.”
Libor is short for the London Interbank Offered Rate. Banks use it to set rates on hundreds of trillions of dollars of credit card, mortgage, student loan and other transactions, and to determine the cost of borrowing from each other.
The states accused Citigroup of concealing from market participants that it made improper Libor submissions to avoid negative publicity and protect its reputation, and had concerns that other banks’ submissions were inappropriate.
Citigroup’s alleged misconduct occurred in 2008 and 2009, during a global financial crisis that led to its acceptance of three U.S. government bailouts.
“Our office has zero tolerance for fraudulent or manipulative conduct that undermines our financial markets,” Underwood said in a statement. “Financial institutions have a basic responsibility to play by the rules - and we will continue to hold those accountable who don’t.”
Reporting by Jonathan Stempel in New York; Editing by Dan Grebler