Investors Dump Financials as LIBOR Scandal Triggers Lawsuits (XLF) (JPM) (BCS) (C)

Financial stocks tumbled Thursday, with shares of JPMorgan (NYSE: JMP) and Citigroup (NYSE: C) losing 3.5 percent and 2.5 percent, respectively. The decline is being tied to regulatory probes following the LIBOR rate-fixing scandal centered on Barclays (NYSE: BCS).

Last month Barclays agreed to pay $350 million to settle charges filed by regulators in the U.S. and England. The scandal forced Barclays' CEO to announce his resignation this week, and now investors fear civil suits will soon follow in the wake of the headlines.

Charles Schwab Corp (NYSE: SCHW) was one of the first companies to file suit and others are getting onboard. More than a dozen banks have been named in proposed class-action and individual suits.

Financial Select Sector SPDR (NYSE: XLF) is trading lower by 1.3 percent. The S&P 500 (NYSE: SPY) is lower by 0.31 percent.

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