Diamond in the Rough: Barclays (BCS) Slammed on Libor Manipulation Fines

June 28, 2012 8:21 AM EDT
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Barclays (NYSE: BCS) shares are getting slammed Thursday as reaction to the massive fines being levied on the firm begin to take hold with investors.

According to reports Wednesday, the bank is being fined about £290 million ($453.6 million) to settle a Libor manipulation investigation with U.S. and U.K. regulators. The disclosure also has many jeering for the resignation of CEO Robert Diamond.

Diamond and three other executives will forgo their bonus for 2012, reports had said Wednesday.

Barclays management, in 2007, was said to submit artificially low bids for Libor rates as pressure began to mount on derivative trading losses. In addition, traders in New York, London, and Tokyo tried to manipulate Libor in order to help out trading positions. Requests were made to bank's rate submitters almost daily for a few years starting in mid-2005 through at least the end of 2007.

Others being eyed by the U.K.'s Financial Services Authority, the U.S. Commodity Futures Trading Commission and the U.S. Department of Justice's fraud section include: Royal Bank of Scotland Group Plc (NYSE: RBS), Citigroup Inc. (NYSE: C), UBS AG (NYSE: UBS), ICAP Plc (IAP), Lloyds Banking Group Plc (NYSE: LYG) and Deutsche Bank AG (NYSE: DB).

Shares are down about 12 percent in pre-market action.

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