Citigroup and JP Morgan look set to pay a combined total of $182.5 million to settle a case brought against them, as well as a number of other banks, by a group of investment companies. The two banking giants are accused of having violated antitrust laws.
Along with a handful of other banks, Citigroup and JP Morgan allegedly manipulated the European Interbank Offered Rate (Euribor) – an interest rate benchmark used by firms as a reference point for euro-denominated financial instruments.
A number of buy-side firms, including pension fund the California State Teachers’ Retirement System, brought litigation against the banks involved, saying they rigged the Euribor rate and fixed the prices of Euribor-based derivatives from June 2005 until March of 2011.
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Third Fine in a Year for JP Morgan
Reuters reported on Friday that JP Morgan and Citigroup deny any wrongdoing in the settlement. Instead, they will pay the settlement fees to avoid a lengthy legal process and expensive litigation – and public relations – costs.
This is the second fine that JP Morgan has paid in under a week. The American investment bank was fined $7 million by authorities earlier this week for working with rival banks to rig the Australian Bank Bill Swap Reference Rate.
In June of this year, the firm was also fined $65 million for manipulating the US Dollar International Swaps and Derivatives Association Fix.
Thus far, US courts have managed to squeeze close to half a billion dollars out of banks involved in the Euribor manipulation scandal. Deutsche Bank paid $170 million in June of last year, and Barclays coughed up $94 million in late 2015.