Finance partner Les Jacobowitz was recently quoted by Banking New York for an article focused on investigations by the US Department of Justice into alleged manipulation of the London interbank offered rate (LIBOR).

The article reported the Justice Department is looking into activity in at least five states and that several large mutual-fund companies “have launched internal investigations into whether their funds have been harmed by alleged interest-rate rigging by large banks. Mutual funds invest in a variety of securities and other financial instruments with interest rates tied to LIBOR. If some banks conspired to keep interest rates low, the returns received by the funds and their investors could have been affected.”

“This will be one of the largest financial crisis-related issues of the Great Recession confronting large banks due to the dollar magnitude of the issue and LIBOR’s broad use to consumers and companies,” Mr. Jacobowitz said. “It is estimated that there are $150 to $300 trillion of dollars of debt tied to LIBOR. These include variable rate mortgages, variable rate notes/bonds, commercial lines of credit and commercial loans.”

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