It was widely known in the mortgage industry that the financial institutions that set the LIBOR ( London Interbank Offered Rate) benchmark rates that governed a number of mortgage rates were rigged. Some said to hide the weaknesses of individual banks, others believing that it was to improve revenue.

Now, we are seeing the five of the world’s biggest banks may be allowed to plead guilty in a criminal case …  

Five of the world's biggest banks are expected to plead guilty in an unprecedented criminal case

Five of the world's biggest banks are expected to be hit with a combined bill of more than $5 billion and criminal charges on Wednesday in a settlement with U.S. and British authorities over rigging of currency markets.

It will mark another dark day for an industry trying to put past sins behind it and brings the total in penalties some big banks will pay for their traders allegedly manipulating the $5-trillion-a-day foreign exchange market to about $10 billion.

U.S. banks JPMorgan and Citigroup and Britain's Barclays and Royal Bank of Scotland are expected to plead guilty to criminal charges with the U.S. Department of Justice related to forex [foreign exchange]manipulation, people familiar with the matter said.

It would be unprecedented for the parent companies or main banking arms of so many major banks to plead guilty to criminal charges in a coordinated action. JPMorgan and Citigroup would be the first major U.S. banks to plead guilty to criminal charges in decades.

Individuals at Barclays could also be held accountable if there is evidence of bad conduct, New York's banking regulator Benjamin Lawsky told Reuters on Tuesday, echoing a warning he made last week.

More at: 5 of the world's biggest banks are expected to plead guilty in an unprecedented criminal case

Bottom line …

So who benefits from the $5-billion in fines? Certainly not those who saw the mortgage, auto, and other loans artificially inflated by manipulative traders.

So who is likely to go to jail? Certainly not those at the top who cashed out for hundreds of millions based on fraudulent transactions.

What I expect to see is the standard lines … “we agree to pay a record fine without admitting or denying the allegations” or “the corporation – which cannot go to jail – freely admits they were complicit in criminal activities caused by certain rogue traders.”

Like all politically-connected bigwigs, nothing much will happen to the top bankers who profited from the manipulations and the legal costs will come out of the shareholders, insurance companies, and the depositors who receive lower rates.

Perhaps we should look at the revolving door between the regulatory agencies and the wrongdoers?

We are so screwed.

steve