Schneiderman’s demands for documents and information from Deutsche Bank, Citigroup, JPMorgan Chase, Royal Bank of Scotland, HSBC, UBS and Barclays are said to have been sent out over the past month.
According to reports in the Financial Times, Schneiderman has collaborated with George Jespen, Connecticut’s attorney-general, in a double-pronged approach.
Their move to hold the banks accountable follows a cross-border investigation and subsequent fine of Barclays, where the FSA, US Commodity Futures Trading Commission, US department of Justice, Federal Bureau of Investigation and the Securities and Exchange Commission worked together to illuminate the banks wrongdoings.
Regulators across the UK, Canada, Japan and the US continue to explore the possibility that multiple banks colluded to manipulate benchmark rates.
The FT report continues: “What may set Schneiderman’s probe apart is his ability to use the Martin Act, a 1921 New York law considered one of the country’s most powerful prosecutorial tools.
“The law allows Schneiderman to investigate anyone doing business in New York and to bring cases without having to show that the accused intended to commit fraud.”
The ability of New York to independently bring action against banks was demonstrated just yesterday when Standard Chartered agreed to pay a $340m fine for laundering money on behalf of Iran.
To read more on the effect these crises are having on the investment case for financials, click here.
