UBS bank entrance sign (Photo: AP)

New York Attorney General Barbara D. Underwood said Friday that UBS signed off on a $68 million, multi-state settlement concerning manipulation of the London Interbank Offered Rate, used as the benchmark interest rate worldwide.

The news comes about five months after Citigroup agreed to pay 42 states $100 million to resolve a similar probe.

“Manipulative or fraudulent conduct that undermines the integrity of our financial markets will not be tolerated,” according to Underwood. “Our office is committed to holding financial institutions accountable for their misconduct.”

The attorneys general from 39 states and the District of Columbia say UBS “misrepresented the integrity of the Libor benchmark by concealing, misrepresenting and failing to disclose that UBS at times made [U.S. dollar] Libor submissions to avoid negative publicity and protect the reputation of the bank.”

In addition, the firm made Japanese yen Libor submissions to benefit its derivative trading positions, according a statement from Underwood.

Through these arrangements, UBS “made millions in unjust gains when government entities and not-for-profit organizations entered into swaps and other financial instruments with UBS without knowing that UBS and other banks on the USD-Libor-setting panel were manipulating their Libor submissions,” Underwood’s office explained.

“We are pleased to have resolved this legacy matter related to events that are almost a decade old,” UBS said in a statement on Friday. “It was achieved with the best interests of our shareholders in mind.”

With the UBS settlement, the states have collected $488 million in payments from four banks. As part of the settlement, UBS will continue to cooperate with the states’ ongoing investigation.

The 40 states are: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia, Washington, West Virginia and Wisconsin.