LIE-BOR Scandal Grows

The investigation into the apparent LIBOR raet fixing by Barclays and other banks is growing. Apparently, the New York Federal Reserve knew of potential LIBOR rate fixing as early as 2007, but no action was taken. The Justice Department's criminal division is investigating several banks and their employees, building a criminal case. Charges are expected to be filed against at least one bank by the end of the year. While most regulators can only pursue civil action and levy fines, the Justice Department investigation could lead to fraud charges and possible jail sentences for traders and other employees. The Attorneys General in New York, Connecticut and Massachusetts are also investigating LIBOR manipulation to determine the effects on states' investments and borrowings. And the Commodities Futures Trading Commission is pursuing a civil case against UBS.