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Bank traders under scrutiny for rate-rigging

Regulators are investigating several groups of traders around the world for allegedly colluding to manipulate interest rates, according to a report.

The ongoing criminal and civil investigation is focused on more than a dozen traders from at least nine banks, according to a report in The Wall Street Journal. They allegedly worked together in small groups to influence various interest rates on separate continents, the report said.

The traders under investigation are separate from the alleged collusion involving Barclays, which came to light in late June when the U.K. bank paid about $450 million and admitted that some of its traders and executives had tried to fix the London interbank offered rate, or LIBOR, and other interest rates. The rates are used to set payments on some $360 trillion worth of financial instruments, ranging from credit cards to more complex derivatives, such as futures contracts.

Barclays is the only bank to admit any misconduct in giving false information in the complex process of setting LIBOR and other interest rates.

Other banks that have disclosed that they are under investigation for LIBOR manipulation include Citigroup and JPMorgan Chase, and also HSBC, Deutsche Bank and the Royal Bank of Scotland.

The alleged ring of traders mentioned in the Journal article worked at six of the 16 banks that were members of the panel that set an interest rate called the daily yen LIBOR rate -- an interest rate at which banks lend one another funds denominated in the Japanese currency.

The banks named in the report were Citigroup, Deutsche Bank AG, HSBC Holdings, JPMorgan Chase, RBS and UBS, according to the report.

Regulators are being helped with their investigation by Barclays and Swiss bank UBS, which employed traders who allegedly were leaders of two groups now under investigation, according to the newspaper.

As a result of the increased scrutiny from regulators, the banks where the traders worked are under growing pressure to explain what they knew about the alleged interest-rate rings, the Journal said.