Petaluma, Calif., July 16 (Reuters) - The biggest U.S. public pension fund will seek damages if it finds it has been hurt by the Libor scandal, its chief investment officer said on Monday.
Suspected manipulation by global banks of Libor benchmark international rates shows the financial services industry cannot be trusted to act in the best interest of long-term investors like the California Public Employees' Retirement System and any misdeeds uncovered in Libor probes need to prosecuted, said Joe Dear, who oversees the assets of the $233 billion pension fund.
Dear said it is not clear how or if the fund may have been affected by the Libor scandal. The fund needs to sort out whether it benefited from some suspected transactions, was hurt by others, or both.
"That's not going to be easy to do," Dear said at a press event at a meeting of the pension fund's officers and staff in Petaluma, California.
Libor is compiled from estimates by big banks of how much they believe they have to pay to borrow from each other and is used for $550 trillion of interest rate derivatives contracts. It also influences rates on many lending transactions, including mortgages, student loans and credit card transactions.
On Sunday, a spokesman for New York Attorney General Eric Schneider said the state is investigating possible rigging of Libor, and other states, such as Florida, are also looking at possible legal actions. Connecticut's attorney general launched a probe six months ago.
U.S. and British authorities last month fined Barclays Plc , the bank at the center of the Libor scandal, a record $450 million for manipulating the rate. Barclays employees are not shielded from criminal prosecution. The U.S. Justice Department is also building criminal cases against several financial institutions and their employees, The New York Times reported on Saturday.