Oregon recoups $430K from interest rate manipulation settlement

Oregon Treasurer Tobias Read and Attorney General Ellen Rosenblum announced Monday the latest settlement involving a number of financial industry giants for wrongly manipulating a key interest rate on international short-term loans.

The wrongdoing came at the expense of consumers worldwide, as well as large institutional investors such as the Oregon Public Employees Retirement Fund.

The participating global banks pleaded guilty and paid major fines — and a coalition of 42 state attorneys general, Rosenblum, subsequently entered negotiations to recoup losses, on behalf of state treasurers and state-managed investments.

In a settlement finalized this month with Germany-based Deutsch Bank AB, the Oregon pension fund recouped $430,399.

“This settlement is good news for Oregonians,” said Read, who applauded the work of Rosenblum and her colleagues. “We will take action if people defraud the portfolio and the beneficiaries who depend on it,” he said.

“This is another example of state Attorney’s General working together to make sure we protect taxpayer assets, and hold the financial industry accountable,” Rosenblum said. “It does not matter who you are –financial institutions and banks simply do not get to write their own rules at our expense.”

Deutsch Bank is one of several global banks that admitted manipulating the London Interbank Offered Rate, or LIBOR, until the practice was shut down amid the Global Financial Crisis. Settlement talks are ongoing with several of them.

Barclays reached an earlier LIBOR-manipulation settlement with Oregon, worth $305,578.

LIBOR is a benchmark interest rate that affects financial transactions worth trillions of dollar and with widespread impacts to global markets and consumers. The attorneys general investigation was led by New York.

The Oregon State Treasury protects public assets, saves money, and helps Oregonians to invest in themselves and their families through empowerment programs like the Oregon College Savings Plan, Oregon ABLE Savings Plan, and OregonSaves. Treasury oversees public investment, banking, and debt management services. State investment policies are set by the Oregon Investment Council. Treasury also promotes public outreach and education to help Oregonians learn strategies to save money and make smart financial choices.

The Oregon Department of Justice (DOJ) is led by Attorney General Ellen Rosenblum, and serves as the state’s law firm. The Oregon DOJ advocates for and protects all Oregonians, especially the most vulnerable, such as children and seniors. The Oregon DOJ has nine divisions, ranging from Criminal Justice to Child Support.