Citigroup Inc. unit Citibank agreed to pay $100 million in the aggregate to 42 states for manipulating the London Interbank Offered Rate, a benchmark interest rate, before and during the financial crisis, which costed investors millions of dollars, as announced by Washington State Attorney General Bob Ferguson on June 15. Those manipulations probably contributed to investors making riskier investments than they realized, or affected the profits from or costs of various investments across the financial system.

A multistate investigation started in 2012 found that Citibank's managers asked the staff submitting LIBOR estimates to reduce their numbers to not make Citibank appear to be in financial trouble and needed to pay a higher rate than some of its peers to borrow money. Also, at various occasions from 2007 to 2009, traders from Citibank and other banks asked Citibank's LIBOR submitters to change their submitted numbers in order to benefit their trading positions. Citibank's wrongdoing defrauded government and nonprofits in Washington and across the country of millions of dollars.

Of the $100 million, $95 million will be used for restitution back to investors. Public entities and nonprofits that signed LIBOR-linked investment contracts with Citibank between 2007 and 2009, will be notified of this case if they are eligible to receive a distribution from the $95 million settlement fund. The rest will be used to pay investigation costs and for other uses consistent with state law.

Citibank is one of several banks under investigation by state attorneys general for LIBOR manipulation.

In two similar antitrust cases brought by Attorney General Ferguson and other attorneys general, Barclays paid $100 million and Deutsche Bank paid $220 million. These cases returned more than $12.8 million to Washington government and nonprofit entities.