Barclays reaches $100M Libor settlement

Barclays Bank PLC (BCS) has agreed to pay $100 million to settle allegations that its manipulation of a global financial benchmark defrauded government entities and non-profit groups across the U.S.Announced Monday, the settlement includes $93.35 million for restitution to victimized groups that agree to opt in and issue releases to Barclays.

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The settlement centers on the London Interbank Offered Rate, known as Libor, a financial standard used to set the rates on trillions of dollars in mortgages, loans, credit cards and complex transactions known as financial swaps. Libor rates are based on estimates of what London-based representatives of major banks would charge each other for loans in various currencies over multiple

U.S. state authorities alleged that Barclays managers told employees to lower their Libor estimates during the global financial crisis. The instructions, from roughly 2007-2009, represented an alleged effort to avoid the appearance that Barclays faced financial difficulty and had higher borrowing costs than its competitors.

Additionally, the U.S. authorities charged that Barclays' traders periodically asked the bank's representatives to change their Libor submissions from roughly 2005 to 2007, and continuing into at least 2009. The changes were designed to boost profits.

U.S.-based entities and non-profits were defrauded of millions of dollars when they executed financial swaps and other transactions without knowing about the alleged manipulation, authorities charged.