Citigroup Inc. (NYSE:C) apparently may not be completely outside the tangled web of the Libor scandal that ensnared several of its international competitors. After several other banks have been embroiled in investigations in the United States and United Kingdom, now the tsunami has gotten Citigroup Inc. (NYSE:C), as the company was just given a subpoena to testify about its role in the alleged manipulation of Libor rates.
New York State Attorney General Eric Schneiderman and Connecticut AG George Jepsen are conducting a joint criminal investigation of several banks in this case of supposedly manipulating the rate, something that came about upon the admission by Barclays that it had actively engaged in the manipulations of the rate, while led to a $454 million fine for the bank and the resignation of CEO Robert Diamond.
Citigroup Inc. (NYSE:C) says there is no immediate indication whether Citigroup is actually being implicated in the scandal, as it describes the subpoena as about information-gathering. “(Citigroup’s subsidiaries) have received additional requests for information and documents from various U.S. and non-U.S. governmental agencies, including the offices of the New York and Connecticut attorneys general,” the company said in an SEC filing.
The Libor rate is a London-based interest rate that banks charge each other for loans over various periods – from overnight to one year. Many international banks use this rate, which as always been considered a neutral, objective rate that relected the market conditions – until Barclays opened the curtain.
Citigroup Inc. (NYSE:C) is expected to submit its information and testimony to the two state attorneys general’s investigation, which is being watched by a couple other states’ top prosecutors – Florida AG Pam Bondi is “actively reviewing the Libor matter” and has submitted subpoenas, and Massachusetts AG Martha Coakley announced in July that it had opened an investigation of its own and is currently working with other state agencies.
While there is no actual indication that Citigroup (NYSE:C) was actually involved in the Libor manipulation, it will likely be of good interest to see what insight Citigroup might provide to these investigations.