Lloyds Banking To Pay About $370 Mln To Settle Libor Investigations

(RTTNews) - British lender Lloyds Banking Group plc (LLOY.L, LYG) said Monday that it has reached settlements to pay fines totaling 218 million British pounds, or about $370 million, to resolve allegations by U.S. and UK federal authorities that the bank attempted to manipulate global benchmark interest rates, including the London interbank offered rate or Libor.

The settlements in relation to the Libor are part of an industry-wide investigation by the regulators into the setting of interbank offered rates across a range of currencies. British lender Barclays Plc (BCS, BARC.L) was fined 290 million pounds in 2012 over the manipulation of interbank rates.

Lloyds, which is partly owned by the British government, noted that the manipulation of submissions covered by the settlements took place between May 2006 and 2009.

The company said that the individuals involved have either left the company, been suspended or are subject to disciplinary proceedings. Further, Lloyds said its board will now consider all the remuneration implications and potential actions available to it.

Lord Blackwell, Chairman of Lloyds Banking Group said, "The Board regards the actions of these individuals between 2006 and 2009 as completely unacceptable. Their behaviour involved a gross breach of trust and we condemn it without reservation."

Lloyds said that on Libor, it has reached settlements with the Financial Conduct Authority or FCA in the UK, the U.S. Commodity Futures Trading Commission or CFTC, and the U.S. Department of Justice or DOJ, in relation to investigations into submissions between May 2006 and 2009 as well as related systems and controls failings.

Under the settlement, Lloyds has agreed to pay 35 million pounds, 62 million pounds and 51 million pounds to the FCA, CFTC and DOJ respectively. As part of the settlement with the DOJ, Lloyds has also entered into a 2-year deferred prosecution agreement, deferring criminal wire fraud charges in exchange for Lloyds continuing to cooperate and agreeing to an $86 million penalty.

Further, Lloyds said it has agreed to pay 70 million pounds to the FCA in connection with the resolution of the British Bankers' Association or BBA Sterling Repo Rate issue as well as related systems and controls failings.

This issue involved four individuals who the FCA has concluded manipulated BBA Repo Rate submissions to reduce fees payable under the Special Liquidity Scheme or SLS. The submissions were made between April 2008 and September 2009.

The company noted that both the CFTC and DoJ settlements are in respect of LIBOR only and neither agency has taken action regarding the BBA Repo Rate.

Lloyds will release its 2014 half-year results on July 31, 2014.

In a separate statement, the U.S. Commodity Futures Trading Commission or CFTC said it has issued an order against Lloyds Banking Group plc and Lloyds Bank plc, bringing and settling charges for acts of false reporting and attempted manipulation of the Libor for the Sterling, the U.S. dollar, and the Japanese yen.

The CFTC noted that the false reporting and attempted manipulation of the Libor to benefit cash and derivatives trading positions were committed by employees of Lloyds TSB and HBOS plc, which was acquired by Lloyds in January 2009.

The CFTC said that its order requires Lloyds to pay a civil monetary penalty of $105 million, cease and desist from their violations of the Commodity Exchange Act, and to adhere to specific undertakings to ensure the integrity of LIBOR submissions in the future.

The CFTC noted that in a related action, the DOJ imposed a penalty of $86 million on Lloyds, while the UK's FCA issued a final notice regarding its enforcement action against Lloyds Bank as well as Bank of Scotland plc and imposed collectively on both companies a penalty of 105 million pounds, or about $179 million.

LYG is trading at $5.09, down $0.08 or 1.55 percent on a volume of 334,321 shares.