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August 8, 2016
For More Information, contact:
Luther Strange
Mike Lewis (334) 353-2199
Alabama Attorney General
Joy Patterson (334) 242-7491
Page 1 of 2


LIBOR manipulation hurt government and not for profit
counterparties in Alabama and across the country

(MONTGOMERY)–Attorney General Luther Strange today announced a $100
million national settlement with Barclays Bank PLC and Barclays Capital Inc. for
fraudulent and anticompetitive conduct involving the manipulation of LIBOR–a
benchmark interest rate that affects financial instruments worth trillions of dollars and
has a widespread impact on global markets and consumers.

The investigation, conducted by a multistate working group of 44 State
Attorneys General and led by the Attorneys General of New York and Connecticut,
revealed that Barclays manipulated LIBOR through two different kinds of fraudulent
and anticompetitive conduct. First, during the financial crisis period of roughly 2007-
2009, Barclays’ managers frequently told LIBOR submitters to lower their LIBOR
settings in order to avoid the appearance that Barclays was in financial difficulty and
needed to pay a higher rate than some of its peers to borrow money. The LIBOR
submitters complied with the instructions and suppressed their LIBOR submissions
during that period. Second, at various times from 2005 to 2007 and continuing at least
into 2009, Barclays’ traders asked Barclays’ LIBOR submitters to change their LIBOR
settings in order to benefit their trading positions, and the submitters often agreed to
the requests. At times, those requests came from traders outside the bank, and Barclays
traders agreed to pass them along to Barclays’ submitters, thus colluding with other
banks. Barclays also believed that other banks’ LIBOR submissions likewise did not
reflect their true borrowing rates, and that therefore, published LIBOR did not reflect
the cost of borrowing funds in the market, as it was supposed to do.

–more –

501 Washington Avenue * Montgomery, AL 36104 * (334) 242-7300
www.ago.state.al.us Page 2 of 2

Government entities and not-for-profit organizations in Alabama and
throughout the U.S., among others, were defrauded of millions of dollars when they
entered into swaps and other investment instruments with Barclays without knowing
that Barclays and other banks on the U.S. dollar (USD)-LIBOR-setting panel were
manipulating LIBOR and colluding with other banks to do so. The amount of
compensation for Alabama entities will be determined.

Governmental and not-for-profit entities with LIBOR-linked swaps and other
investment contracts with Barclays will be notified if they are eligible to receive
restitution from a settlement fund of $93.35 million. The balance of the settlement fund
will be used to pay costs and expenses of the investigation and for other uses consistent
with state law.

Barclays is the first of several USD-LIBOR-setting panel banks under
investigation by the State Attorneys General to resolve the claims against it, and
Barclays has cooperated fully from the outset. The Attorney General’s Office benefits
from the information and evidence provided by corporations that elect to cooperate
with the Attorney General’s investigations. Such cooperation can facilitate civil
enforcement efforts, including restitution for victims of the offense.

The states joining the Barclays settlement include: Alabama, Alaska, Arizona, Arkansas,
California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia,
Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New
Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode
Island, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia,
Wisconsin and Wyoming The investigation into the conduct of several other USD
LIBOR-setting panel banks is ongoing.