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A New Era of Antitrust Enforcement

"Compliance chiefs on Wall Street have had their hands full lately, thanks to sweeping reforms initiated by the 2010 Dodd-Frank Act. Yet complying with Dodd-Frank is hardly the only serious challenge they face. That is especially true now that federal antitrust authorities are focusing on bid-rigging, interest rate manipulation and other forms of collusion on Wall Street trading desks and turning up the heat on the world’s biggest financial services firms and banks.

"Front and center has been the Justice Department’s investigation into suspected manipulation of benchmark rates — particularly the London interbank offered rate, or Libor — for setting global interest rates. It is a case I oversaw.

"Since 2011, when news of the Libor investigation first broke, antitrust prosecutors have levied hundreds of millions of dollars in fines against offending institutions. Last June, Justice Department lawyers filed criminal antitrust charges against the Royal Bank of Scotland for its role in the Libor case. It was the first time a financial services firm was ever held criminally liable under antitrust laws for a trader-based market manipulation scheme.

"Given the scope of the suspected conspiracy — traders from a dozen of the world’s largest banks have been accused of submitting false data or otherwise colluding to fix Libor — more criminal antitrust charges are possible. And in the wake of the investigation have come charges against traders accused of manipulating other benchmark rates like the euro interbank offered rate, or Euribor. To financial institutions, the message is clear: A new, more vigorous era of antitrust enforcement is at hand — and in fact, just getting started."

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