Barclays Plc was fined 290 million pounds ($453.2 million), thelargest penalties ever imposed by regulators in the U.S. and U.K.,after admitting it submitted false London and euro interbankoffered rates.

Chief Executive Officer Robert Diamond and three lieutenantswill forgo their bonuses as a result, Britain's second-biggest bankby assets said in a statement today. Derivatives traders requestedthe false submissions in the Libor and Euribor setting process, asthey were “motivated by profit and sought to benefit Barclays'trading positions,” Britain's Financial Services Authoritysaid.

The settlements with the FSA, the U.S. Commodities FuturesTrading Commission and U.S. Department of Justice are the first inan international investigation into whether banks tried tomanipulate Libor, the benchmark rate for $360 trillion ofsecurities, to hide their true cost of borrowing. Citigroup Inc.,Royal Bank of Scotland Group Plc, UBS AG, ICAP Plc, Lloyds BankingGroup Plc and Deutsche Bank AG are among firms that are beingprobed by regulators worldwide into how Libor is set.

“Others will follow suit,” said Tom Kirchmaier, a fellow in thefinancial-markets group at the London School of Economics. “Thatthe company settled and the top leadership team forgoes theirbonuses sets the right tone.”

Barclays is assisting with the ongoing investigation into otherfinance firms and individuals, and was the first to provide“extensive and meaningful cooperation” to the U.S. government, theJustice Department said.

Barclays tried to influence other banks' Euribor submissions andreduced their Libor submissions during the financial crisis “as aresult of senior management's concerns over negative mediacomment,” the FSA said. The breaches included “a significant numberof employees and occurred over a number of years,” the regulatorsaid.

“The events which gave rise to today's resolutions relate topast actions which fell well short of the standards to whichBarclays aspires in the conduct of its business,” Diamond, 60, saidin the statement.

The FSA's 59.5 million-pound fine is the British regulator'slargest ever. The CFTC is imposing a $200 million penalty, and theDOJ is fining Barclays $160 million.

“Libor and Euribor are critically important benchmark interestrates,” said Lanny A. Breuer, assistant attorney general of theJustice Department's Criminal Division. “Because mortgages, studentloans, financial derivatives, and other financial products rely onLibor and Euribor as reference rates, the manipulation ofsubmissions used to calculate those rates can have significantnegative effects on consumers and financial markets worldwide.”

Daily Requests

Barclays traders in New York, London and Tokyo attempted tomanipulate rates to benefit their trading positions in swaps andfutures that were tied to the rates, according to the CFTC. Tradersat Barclays made the requests regularly and sometimes daily frommid-2005 through 2007 and sometimes later until 2009, the agencysaid in a statement.

“Banks that contribute information to those benchmarks must doso honestly,” David Meister, the CFTC's director of enforcement,said in a statement. “When a bank acts in its own self-interest byattempting to manipulate these rates for profit, or by submittingfalse reports that result from senior management orders to lowersubmissions to guard the bank's reputation, the integrity ofbenchmark interest rates is undermined.”

Senior Barclays managers told staff to submit artificially lowrates to Libor from August 2007 until early 2009 to boost thebank's financial condition, according to the CFTC.

“We didn't say they succeeded in it,” Bart Chilton, a Democratcommissioner, said in an interview on Bloomberg Television,referring to the attempted manipulation.

Traders at Barclays also coordinated and abetted with traders atother banks to manipulate Euribor, including affecting rates onspecific dates when derivatives contracts are settled or reset,according to the CFTC.

The CFTC required Barclays to put measures in place to ensurethe bank's transactions, subject to certain adjustments, are giventhe most weight in determining Barclays Libor submissions. Barclaysmust put up firewalls between traders and the employees who makethe submissions and retain documents and communications about therates they reports, the CFTC said.

Libor Survey

Libor is derived from a survey of banks conducted each day onbehalf of the British Bankers' Association in London. Lenders areasked how much it would cost them to borrow from each other for 15different periods, from overnight to one year, in currenciesincluding dollars, euros, yen and Swiss francs. After a set numberof quotes are excluded, those remaining are averaged and publishedfor each currency by the BBA before noon.

Employees responsible for Libor submissions have said ininterviews with Bloomberg News they regularly discussed where toset the measure with traders sitting near them, interdealer brokersand counterparts at rival banks. The talks became common practiceafter money markets froze in 2007, they said, making it difficultfor individual bankers to gauge the cost of borrowing from otherlenders.

Regulators are focusing on the lack of so-called Chinese wallsbetween traders and employees making interest-rate submissions onbehalf of their banks, and whether the banks' proprietary tradingdesks exploited the information they had about the direction ofLibor to trade interest-rate derivatives.

Barclays received the FSA's standard 30 percent discount forsettling early. The FSA's biggest fine to date was the 33 millionpounds it levied on a unit of JPMorgan Chase & Co. in 2010 overa failure to segregate client money.

As well as Diamond, Barclays said Chief Operating Officer Jerrydel Missier, Finance Director Chris Lucas and corporate andinvestment banking chief Rich Ricci are also forgoing bonuses thisyear. They had already agreed to cut their deferred bonuses afterinvestors opposed the size of their pay.

Shares of Barclays stayed higher after the announcement and wereup 1 percent to 194.45 pence as of 2:36 p.m. in London. They are up10 percent so far this year.

“The fine will be seen as a one-off and getting a piece ofuncertainty out of the way,” said Simon Willis, an analyst atDaniel Stewart Securities Plc in London.

Diamond got as much as 6.3 million pounds in salary, bonuses andstock awards for 2011 as well as a 5.75 million-pound contributiontoward his personal tax bill.

Bloomberg News

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