Citigroup may plead guilty in rate-rigging case

12 May 2015


Citigroup Inc, the third-largest bank in the United States, said in a filing on Monday it could plead guilty to charges of rigging foreign currency markets to make quick profits.

Citigroup said the justice department had advised that the department does not intend to prosecute the bank in a separate investigation of the setting of inter-bank interest rates -   London Interbank Offered Rate (Libor) - at which banks lend among themselves over the short term.

Citigroup said it estimates potential unreserved litigation costs at $4 billion, unchanged from year-end.

Citigroup is among five banks that are being investigated by the justice department for their role in manipulating the $5-trillion a day foreign exchange markets.

The justice department is probing allegations that traders at Citigroup were fixing foreign exchange rates in order to make a profit.

''A resolution could include a guilty plea on an antitrust charge,'' the bank said in the filing.

But a settlement would also involve payment of penalty that the Justice department demands, which in the case of Citigroup, is around $1 billion, according to a Bloomberg report.

The regulatory filing from the bank revealed that Citigroup Inc is in ''active discussions'' about a settlement with the DoJ, The Wall Street Journal said in a report.

Reports said a guilty plea by the bank would be a blow to chief executive Michael Corbat, who has overseen a period where the bank failed.

He also oversaw the bank pass critical ''stress tests,'' but found itself on the wrong end of a surprise move in Swiss currency rates in January.

Besides Citigroup, Barclays PLC, JP Morgan Chase & Co and Royal Bank of Scotland Group are all expected to separately file guilty pleas related to criminal antitrust charges, say reports.

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