Attorney General Josh Shapiro on Wednesday said Pennsylvania will receive $6.3 million as part of a nationwide $220 million settlement with Deutsche Bank for fraudulent conduct involving interest rate manipulation.
A multistate investigation by 43 Attorneys General found that Deutsche Bank’s phone interest rate submissions involving the London Interbank Offered Rate, or LIBOR, affected financial instruments worth trillions of dollars and had a widespread impact on consumers. Since mortgages, student loans, and other financial products often rely on LIBOR as a reference rate, the manipulation of LIBOR had a major financial impact worldwide, his office said in a news release.
“Pennsylvania school districts, municipalities, and nonprofit organizations were cheated out of millions of dollars by Deutsche Bank’s fraudulent manipulation of interest rate benchmarks,” said Shapiro in the statement. Government agencies like school districts and municipalities and nonprofits with Libor-related investments will be notified if they are eligible to receive a distribution from a nationwide settlement fund.
Deutsche Bank is the second of several banks under investigation by state Attorneys General to resolve LIBOR claims. Barclays was the first lender to settle state investigations, agreeing to pay $100 million to 44 states.