Deutsche Bank fined by US Justice over Libor manipulation

A US court imposed a sentence on a Deutsche Bank unit Tuesday for its role in an interest rate rigging scheme, two years after the bank reached a $2.5 billion settlement with British and US authorities.

The development closed a minor chapter in the legal woes facing the German banking giant, which has rushed to resolve multiple cases with US officials in recent months and still reportedly faces an investigation over possible money laundering.

Traders at the bank, according to the DoJ, colluded with traders and analysts at other banks to try to set LIBOR rates through a clandestine chat room in which traders apparently discussed their illegal behavior. While DB has admitted its employees broke the law by engaging in this conspiracy for seven years between 2003 and 2010, the bank has not admitted to other collusive acts either before or after that time period.

The DoJ was conclusive in its judgment against the bank. According to a press release, the banking regulators concluded that DB "derivatives traders requested that LIBOR submitters at Deutsche Bank and other banks submit contributions favorable to trading positions, rather than the accurate rates that complied with the definition of LIBOR."

Specifically, the derivatives traders requested that LIBOR submitters at Deutsche Bank and other banks submit contributions favorable to trading positions, rather than the accurate rates that complied with the definition of LIBOR.  Through these schemes, Deutsche Bank defrauded counterparties who were unaware of the manipulation. 

The bank in January finalized a $7.2 billion settlement with the US Justice Department over its role in the 2008 global financial crisis. And British and New York officials that month imposed $630 million in fines on the bank over an alleged money laundering in Russia.

US officials also have pursued banks such as Citicorp, JPMorgan, Barclays and RBS over the LIBOR manipulation.