Rabobank Groep, the Netherlands’ biggest mortgage lender, will pay about $1 billion to resolve regulators’ claims that it tried to manipulate benchmark interest rates, two people with knowledge of the matter said.
The settlement, which could be announced as soon as next week, will resolve complaints from the U.S. Commodity Futures Trading Commission and Justice Department, the U.K.’s Financial Conduct Authority, and Dutch regulators, said the people, who asked not to be identified because the agreement isn’t public.
Rabobank would join financial firms including Barclays Plc (BARC) and Royal Bank of Scotland Group Plc that have already paid a total of about $2.6 billion in penalties over accusations that their traders attempted to rig the London interbank offered rate. In December, UBS AG reached a $1.5 billion settlement, the largest to stem from the investigation so far, with authorities in the U.S., U.K. and Switzerland.
Rabobank’s pact would resolve claims related to attempts to manipulate a benchmark rate for Japanese yen, one of the people said. The settlement had been delayed because of the U.S. government shutdown this month that limited support staff available to work the deal, according to the one of the people.
Regulators around the world are examining alleged abuses of financial benchmarks by companies that play a central role in setting them. European regulators are reviewing accusations of collusion in crude oil and biofuels markets, while the U.S. CFTC and Britain’s FCA are probing the potential manipulation of ISDAfix, a benchmark for interest-rate swaps.
Peter Carr, a spokesman for the Justice Department, said in an e-mailed statement that it “has an active, ongoing investigation into possible manipulation of Libor and other international benchmark rates.” He declined to comment on Rabobank.
“The Libor case will be completed within the foreseeable future,” Ben Feiertag, a spokesman for the Dutch central bank said, declining to comment further. Stewart Todd, a spokesman for the FCA, Steve Adamske, the CFTC’s spokesman, and Hendrik Jan Eijpe, a spokesman for Rabobank, declined to comment.
The accord was reported yesterday by the Financial Times.
UBS’s Libor fines included $1.2 billion paid to the Justice Department and CFTC, and 160 million pounds ($260 million) to the U.K. Financial Services Authority. The Zurich-based firm also was forced to was forced to disgorge 59 million francs ($66 million) in estimated profits to the Swiss Financial Market Supervisory Authority.
Royal Bank of Scotland, based in Edinburgh, was fined $612 million by U.K. and U.S regulators on Feb. 6 for making hundreds of attempts to rig rates including yen, Swiss franc and U.S. dollar Libor between 2006 and 2010. London-based Barclays paid a 290 million-pound fine to U.K. authorities over Libor-rigging accusations. ICAP Plc (IAP), the world’s largest broker of transactions between banks, was fined $88 million last month.