(The following is a reformatted version of a press release
issued by The U.S. Justice Department and received via
electronic mail. The release was confirmed by the sender.) 
JULY 28, 2014 
WASHINGTON - Lloyds Banking Group plc has entered into an
agreement with the Department of Justice to pay an $86 million
penalty for manipulation of submissions for the London InterBank
Offered Rate (LIBOR), a leading global benchmark interest rate. 
Assistant Attorney General Leslie R. Caldwell of the Justice
Department’s Criminal Division, Deputy Assistant Attorney
General Brent Snyder of the Antitrust Division, and Assistant
Director in Charge Valerie Parlave of the FBI’s Washington Field
Office made the announcement. 
A criminal information will be filed today in U.S. District
Court for the District of Connecticut that charges Lloyds as
part of a deferred prosecution agreement (DPA).  The information
charges Lloyds with wire fraud for its role in manipulating
LIBOR.  In addition to the $86 million penalty, the DPA requires
the bank to admit and accept responsibility for its misconduct
as described in an extensive statement of facts.  Lloyds has
agreed to continue cooperating with the Justice Department in
its ongoing investigation of the manipulation of benchmark
interest rates by other financial institutions and individuals. 
“For more than three years, traders at Lloyds manipulated the
bank’s LIBOR submissions for three currencies to benefit the
trading positions of themselves and their friends, to the
detriment of the parties on the other side of the trades,” said
Assistant Attorney General Caldwell.  “Because investors and
consumers rely on LIBOR’s integrity, rate-rigging fundamentally
undermines confidence in financial markets.  Lloyds is the fifth
major financial institution that has admitted LIBOR manipulation
and paid a criminal penalty, and nine individuals have been
criminally charged by the Justice Department.  Our active
investigation continues, as we work to restore trust in the
“Lloyds manipulated benchmark rates, allowing its traders to
increase their profits unfairly and fraudulently,” said Deputy
Assistant Attorney General Brent Snyder of the Justice
Department’s Antitrust Division.  “Lloyds’s conduct undermined
financial markets domestically and abroad, and today’s charges
send a clear message that we will continue to bring those
responsible to justice.” 
“Manipulating financial trading markets to create an unfair
advantage is against the law,” said Assistant Director in Charge
Parlave. “Today’s agreement further underscores the FBI’s
ability to investigate complex international financial crimes
and bring the perpetrators to justice. The Washington Field
Office has committed significant time and resources including
the expertise of Special Agents, forensic accountants and
analysts to investigate this case along with our Department of
Justice colleagues. Their efforts send a clear message to anyone
contemplating financial crimes: think twice or you will face the
Together with approximately $283 million in criminal and
regulatory penalties imposed by other agencies in actions
arising out of the same conduct - $105 million by the Commodity
Futures Trading Commission (CFTC), and approximately $178
million by the U.K. Financial Conduct Authority (FCA) - the
Justice Department’s $86 million criminal penalty brings the
total amount to be paid by Lloyds to almost $370 million. 
According to signed documents, LIBOR is an average interest
rate, calculated based upon submissions from leading banks
around the world and reflecting the rates those banks believe
they would be charged if borrowing from other banks.  LIBOR
serves as the primary benchmark for short-term interest rates
globally and is used as a reference rate for many interest rate
contracts, mortgages, credit cards, student loans and other
consumer lending products.  The Bank of International
Settlements estimated that as of the second half of 2009,
outstanding interest rate contracts were valued at approximately
$450 trillion. 
At the time relevant to the conduct in the criminal information,
LIBOR was published by the British Bankers’ Association (BBA), a
trade association based in London.  LIBOR was calculated for 10
currencies at 15 borrowing periods, known as maturities, ranging
from overnight to one year.  The LIBOR for a given currency at a
specific maturity was the result of a calculation based upon
submissions from a panel of banks for that currency (the
Contributor Panel) selected by the BBA.  From at least 2006
through the present, Lloyds (through its subsidiaries) has been
a member of the Contributor Panel for a number of currencies,
including United States Dollar LIBOR, Pound Sterling LIBOR, and
According to the statement of facts accompanying the agreement,
between at least as early as 2006 and at least as late as July
2009, Lloyds’s LIBOR submitters for Dollar LIBOR, Yen LIBOR, and
Pound Sterling LIBOR submitted LIBOR contributions intended to
benefit their own trading positions or the trading positions of
others, rather than rates that complied with the definition of
LIBOR.  When Lloyds LIBOR submitters contributed LIBOR
submissions to benefit trading positions, the manipulation of
the submissions affected the fixed rates on occasion. 
According to signed documents, on May 19, 2009, a money markets
trader who was a former Dollar LIBOR submitter at a subsidiary
of Lloyds wrote to the then-current Dollar LIBOR submitter:
“have 5 yard [billion] 3 month liability rolls today so would be
advantageous to have lower 3month libor setting if doesn’t
conflict with any of your fix’s.”  Later that day, the Dollar
LIBOR submitter told the money markets trader in a phone call:
“obviously we got the Libors down for you.” 
In another example, on March 6, 2009, a money markets trader who
was a former Pound Sterling LIBOR submitter for a subsidiary of
Lloyds told the then-current Pound Sterling LIBOR submitter:
“Um, I’m paying on 12 yards [billions] of 1s today, . . . so if
there is any way of making 1s relatively low it would just be
helpful for us all.”  That day, the Pound Sterling LIBOR
submitter contributed a rate that was ten basis points lower
than the previous day’s submission. 
Also according to the statement of facts, a Yen LIBOR submitter
and a former submitter at Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) who traded money-markets and
derivatives products had an agreement to submit Yen LIBOR
contributions that benefitted their respective trading
positions, rather than submissions that complied with the
definition of LIBOR. 
For example, on July 28, 2006, the Rabobank submitter wrote to
the Yen LIBOR submitter: “morning skipper.....will be setting an
obscenely high 1m again today...poss 38 just fyi.”  The Yen
LIBOR submitter responded: “(K)...oh poor
customers....hehehe!! manual input libors again today then!!!!”
Both banks’ submissions on July 28 moved up one basis point,
from 0.37 to 0.38. 
This ongoing investigation is being conducted by special agents,
forensic accountants, and intelligence analysts of the FBI’s
Washington Field Office. The prosecution of Lloyds is being
handled by Trial Attorney Patrick Pericak of the Criminal
Division’s Fraud Section and Trial Attorney Michael T. Koenig of
the Antitrust Division. Assistant U.S. Attorneys Chris Mattei
and Michael McGarry of the U.S. Attorney’s Office for the
District of Connecticut, along with the Criminal Division’s
Office of International Affairs, have provided valuable
assistance in this matter. 
The investigation leading to these cases has required, and has
greatly benefited from, a diligent and wide-ranging cooperative
effort among various enforcement agencies both in the United
States and abroad. The Justice Department acknowledges and
expresses its deep appreciation for this assistance. In
particular, the CFTC’s Division of Enforcement referred this
matter to the department and, along with the FCA, has played a
major role in the investigation. Various agencies and
enforcement authorities from other nations are also
participating in different aspects of the broader investigation
relating to LIBOR and other benchmark rates, and the department
is grateful for their cooperation and assistance. In particular,
the Securities and Exchange Commission has played a significant
role in the LIBOR investigation, and the department expresses
its appreciation to the United Kingdom’s Serious Fraud Office
for its assistance and ongoing cooperation. 
This prosecution is part of efforts underway by President Barack
Obama’s Financial Fraud Enforcement Task Force. President Obama
established the interagency Financial Fraud Enforcement Task
Force to wage an aggressive, coordinated and proactive effort to
investigate and prosecute financial crimes. The task force
includes representatives from a broad range of federal agencies,
regulatory authorities, inspectors general and state and local
law enforcement who, working together, bring to bear a powerful
array of criminal and civil enforcement resources. The task
force is working to improve efforts across the federal executive
branch, and with state and local partners, to investigate and
prosecute significant financial crimes, ensure just and
effective punishment for those who perpetrate financial crimes,
combat discrimination in the lending and financial markets and
recover proceeds for victims of financial crimes. For more
information about the task force visit: 
(bjh) NY 
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