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HSBC agrees to pay US$100mln to settle US lawsuit over Libor rigging claims

HSBC has become the fourth major bank to settle with over-the-counter investors over Libor manipulation claims
HSBC has denied any wrongdoing

HSBC Holdings PLC (LON:HSBA) has agreed to pay US$100mln to settle a US lawsuit over claims the bank conspired to manipulate the Libor benchmark interest rate.

The lender reached a preliminary accord with over-the-counter investors that transacted directly with banks on a panel to determine Libor, according to legal filings with the US District Court in Manhattan.

HSBC has denied the claims but settled to avoid the costs and risks of litigation.

READ: HSBC full-year profits jump but shares fall as results miss forecasts

It is the fourth major bank to settle with OTC investors over Libor rigging.

Barclays PLC (LON:BARC) paid US$120mln to settle while Citigroup Inc paid US$130mln and Deutsche Bank paid US$240mln.

Banks use Libor, or the London Interbank Offered Rate, to set rates on hundreds of trillions of dollars of credit card, mortgage, student loan and other transactions, and to determine the cost of borrowing from one another.

In October, HSBC, Citigroup and Deutsche Bank agreed to pay a combined US$132mln to settle a US class action brought by futures traders accusing them of manipulating Libor.

HSBC is also being investigated over a £134mln suspected tax evasion scheme created by the lender, The Times reported.

The newspaper said three former employees at the lender’s London office have been interviewed under caution for their role in devising a tax scheme for wealthy backers.

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