The resignation of Bob Diamond will be intended to finally draw a line under the Libor manipulation scandal, but it seems like a story which is likely to run much further than Barclays will ever be happy with. There is a chance the rate-fixing may now result in a US prosecution from 2010 being re-opened, according to reports from Bloomberg.
Tom Schoenberg writes that from March 1995 through to September 2006, the bank allowed and facilitated money transfers to states that the US had trade embargos with, including Iran, Sudan, Libya, Burma and Cuba. When it was caught in 2010, it negotiated a settlement with the US department of justice: it would pay a $298m fine, and avoid criminal prosecution.
At the time, many, including the judge presiding over the case, criticised the settlement as a "sweetheart deal", but while it allowed Barclays to keep its rap sheet clean, it did come with conditions, one of which was that the bank was not allowed to commit "any federal crime".
On May 30 this year, the Department of Justice and Barclays both submitted statements confirming that it was living up to the deal. The DoJ's report concluded "to date, the United States is not aware that Barclays has committed any federal crime during the term of the [deferred prosecution agreement]", while Barclays said it was "aware of no determination by the United States that it has committed any federal crime during the term of the DPA".
Now, Judge Sullivan, who presided over the original case, has asked both parties to explain how the Libor settlement affects that agreement. If it goes the wrong way for Barclays, they could well find that more than one old misdeed ends up hurting them this summer.