WASHINGTON/LONDON – U.S. regulators plan to join their UK peers in a multi-billion-dollar settlement with a group of the biggest global banks accused of manipulating the foreign exchange market, sources familiar with the matter said, adding the deal could come as early as next week.
The U.S. Commodity Futures Trading Commission, which oversees futures and swaps trading, aims to announce its settlement around the same time as London’s Financial Conduct Authority, said one of the sources, who was not authorized to speak publicly.
The U.S. Office of the Comptroller of the Currency and the Federal Reserve, which regulate banks, would also join, a second source familiar with the talks said, though the exact timing may not align with the UK because of when markets open.
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(Reuters) – A sprawling, global investigation into whether banksmanipulated Libor benchmark interest rates may result in U.S. charges against more individual defendants and a guilty plea from another bank, a U.S. Department of Justice lawyer said on Thursday.
Michael Koenig, the federal prosecutor, said during a New York federal court hearing that the Justice Department had “individual targets in mind” for potential charges and “at least one other bank entity we anticipate entering into plea negotiations with.”
“We do have some more in mind, but we’re at the tail end of that,” he said.
Koenig did not name the bank or individuals. Peter Carr, a Justice Department spokesman, declined to identify potential targets of what he called an “active, ongoing investigation.”
The legal tussle continues over manipulation of the London Interbank Offered Rate (LIBOR). This time, financial bigwigs including Bank of America Corporation (BAC – Analyst Report), Mitsubishi UFJ Financial Group Inc., Barclays PLC (BCS –Analyst Report) and Citigroup Inc. (C – Analyst Report) have filed a motion in the Manhattan federal court seeking release from claims of manipulating the LIBOR.
U.S. District Judge Naomi Reice Buchwald who is looking into the related antitrust cases against the banks and the British Bankers’ Association (BBA) has been asked by the banks to dismiss charges from 17 lawsuits pertaining to Libor-based over-the-counter (‘OTC’) transactions and other related deals.
In their standing, the banks cited that the investors’ allegations are improper and some other allegations no longer remain valid as these have been dismissed by previous court rulings.
Bill Brennan calls subprime mortgage lending “the biggest type of fraud” he saw in roughly a quarter of a century as director of the Home Defense Program of the Atlanta Legal Aid Society.
To this day, eight years after the foreclosure crisis that plunged the American economy into a deep recession, he said he couldn’t believe that banks would so willingly risk their reputations to loan money to people who would have difficulty paying it back. The predatory lending that contributed to the undoing of the financial system disproportionately targeted black and Latino families and set them up with risky loans. Institutions even convinced minorities firmly in the middle class to take loans with adjustable rates when they qualified for the standard, 30-year fixed mortgage.
Atlanta was one of several cities in the country that took the brunt of the hit caused by the housing crash. According to Brennan, the housing bubble might have been completely avoidable, but Wall Street firms battled against regulations that could have protected homeowners. (Fault Lines’ look at investment firms’ new housing bet, “Wall Street Landlords,” premieres on Al Jazeera America on Saturday, November 8, at 7 pm ET/4 PT.)
Fault Lines sat down with Brennan at his home in Atlanta to discuss one such law that was briefly on the books in Georgia. The Georgia Fair Lending Act went into effect October 1, 2002, and according to the Federal Reserve Bank of Atlanta, it was believed to be “the most restrictive in the country,” imposing harsh penalties on brokers, as well as people who purchased mortgages on secondary markets.
An edited version of the conversation follows:
Law360, New York (November 07, 2014, 3:22 PM ET) — Bank of America Corp. and U.S. Bancorp have agreed to pay $69 million to settle a class suit over their role as trustee for mortgage-backed securities containing shoddy loans issued by Washington Mutual Inc., which collapsed at the height of the 2008 financial crisis, according to a Friday court filing.
In the New York federal court filing, attorneys for the plaintiffs described the deal as the first-ever settlement in a class action over the conduct of a residential mortgage-backed securities trustee. Pension funds and other investors…