As regulators ramp up a global investigation into the manipulation of interest rates, the Justice Department has identified potential criminal wrongdoing by big banks and individuals at the center of the scandal, the New York Times reports. The department is building cases against several financial institutions and their employees, including traders at Barclays, the British bank. Charges are expected against at least one bank later this year.
The prospect of criminal cases is expected to rattle the banking world and provide a new impetus for financial institutions to settle with authorities. The Justice investigation comes on top of private investor lawsuits and a regulatory inquiry led by the Commodity Futures Trading Commission. The civil and criminal actions could cost the banking industry tens of billions of dollars. Authorities are examining whether financial firms manipulated interest rates before and after the financial crisis to improve their profits and deflect scrutiny about their health. The investigations have focused on how banks set the London interbank offered rate, known as Libor.