October 25, 2017 – Deutsche Bank AG has agreed to pay $220 million to settle U.S. regulatory charges that it defrauded government and nonprofit entities by manipulating Libor and other benchmark interest rates.

The settlement with the German bank was announced on Wednesday by the attorneys general of New York and California, Eric Schneiderman and Xavier Becerra, who led the probe by 44 U.S. states and Washington, D.C.

Deutsche Bank is the second bank to settle the multistate probe, following a $100 million settlement by Britain’s Barclays Plc (BARC.L) in August 2016.

Both banks agreed to cooperate in the probe into several other banks, which is continuing.

Wednesday’s settlement came 2-1/2 years after Deutsche Bank agreed in April 2015 to pay $2.5 billion to settle rate-rigging probes by U.S. and British regulators, and a London-based unit pleaded guilty to criminal wire fraud.

The bank has also reached multiple rate-rigging settlements in private U.S. investor lawsuits.

“This settlement resolves the bank’s final pending U.S. regulatory inquiry related to Libor,” Deutsche Bank spokesman Troy Gravitt said in a statement about Wednesday’s accord.

Banks use Libor, or the London Interbank Offered Rate, to set rates on roughly $350 trillion of credit card, mortgage, student loan and other transactions, and to determine the cost of borrowing from one another.

Deutsche Bank admitted to allegations that from 2005 to 2009, it made false or misleading Libor submissions, tried to influence other banks’ submissions to benefit its own trading positions, and concealed its deception from customers.

The settlement agreement included emails and instant messages detailing the alleged manipulation, including one in which a Libor submitter told a trader who sought a particular quote: “Ok will try to give you a belated Christmas present.”

Schneiderman said such conduct can interfere with or undermine confidence in financial markets.

“Large financial institutions, like all other market participants, have to abide by the rules,” he said in a statement.

Banks have paid roughly $9 billion to settle Libor-rigging probes worldwide.

In July, Andrew Bailey, head of the U.K. Financial Conduct Authority, said that regulator will phase out Libor by the end of 2021, citing a lack of data underpinning it.

Deutsche Bank’s settlement includes $213.35 million for entities that suffered losses from alleged manipulation. The rest will cover costs incurred in the investigation.

By Jonathan Stempel, Reuters
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