Least Favored in 2013: Featuring the year's shockers from Wall Street to Washington. Read Fed Policy shenanigans; Tech spies; SeaWorld tragedy; Caterpillar-China scandal; Bud Beer scandal; Bill Ackman's Herbalife; LIBOR rigging; Forex Scandal; and check out this video CEO Walk of Shame.
NEW YORK (TheStreet) -- One of the most important scandals of 2013 actually came to light in 2012 and won't likely conclude until sometime in 2014. Many large banks allegedly colluded to manipulate the LIBOR, or London Interbank Offered Rate, which contributes to how interest rates are set on various types of worldwide consumer loans and revolving debt. Investigations and prosecutions are ongoing.
Banks alleged to be involved in the trans-Atlantic rigging include Citigroup (C), Barclays (BCS), UBS (UBS), JPMorgan (JPM - Get Report), Credit Suisse Group (CS), Royal Bank of Canada (RY), Goldman Sachs (GS - Get Report) and Morgan Stanley (MS).Bloomberg reports that 13 banks in all have been sued. The scope of this scandal is wide. So many banks may have been involved in manipulating rates, and by extension manipulating what consumers pay for credit cards, mortgages and auto loans. While the LIBOR rigging story is not as tabloid-ready as a sex scandal or perp walk -- although there may yet be perp walks to come -- it is arguably the most important scandal of 2013. Its reach is wide. Banks may have fattened profits illegally at the expense of millions of consumers. There is of course a long history of Wall Street sticking it to customers. As the old skit from Saturday Night Live in the 1970s used to say, it's always something, and if it's not one thing it's another. Think of the line in Michael Lewis's Liar's Poker about customers having "their faces ripped off." Or remember the more recent exploits of Fabrice Tourre, who took the fall at Goldman Sachs for lying to investors about Paulson & Company's position in the now infamous Abacus investment vehicle. My first job out of college was at Lehman Brothers in the late 1980s. While I don't believe that anything we were pressured to do was illegal, clients truly didn't understood the conflicts of interest. Otherwise they all would have fired the firm.