Citi Settles Benchmark Rigging Allegations With $425M Payment
Citigroup will pay out $425M to resolve claims it attempted to rig interest-rate benchmarks between 2007 and 2012.
The US Commodity Futures Trading Commission accused the bank of messing with the ISDAfix benchmarks in London and Tokyo, which help determine the value of interest-rate swaps as well as the coupons paid for bonds tied to commercial real estate, Bloomberg reports. The CFTC also claimed traders at Citi bought and sold US government debt in order to improperly influence the ISDAfix.
And while Citi neither admitted to nor denied the allegations, one of the bank’s traders wrote back in 2008 that the ISDAfix benchmark is “surprising[ly] easy to push! [I] think last week, [I] pushed it 3bps from 10:55 to 11:05 :)” according to messages cited by the government.
That smiley face, and the bank’s multimillion-dollar payout, says it all. [Bloomberg]
