New York’s Attorney General has opened an investigation in to the alleged rigging of the benchmark Libor rate.
Eric Schneiderman, along with his Connecticut counterpart George Jepsen, have been investigating the matter for six months, according to Mr Schneiderman’s spokesman.
A number of large banks also have trading floors in Connecticut.
The New York Attorney General has powerful legal tools at his disposal.
His office is able to bring both civil and criminal charges, and can use a state fraud law that allows prosecuting authorities to establish financial fraud even if it wasn’t intended.
The news of this latest investigation follows a report that the Department of Justice is building criminal cases against several banks as well as individual employees, including traders at Barclays.
The New York Times also reported that US authorities are expecting to file charges against at least one bank within the year, and suggested Swiss bank UBS (NYSEArca: DJCI - news) could be the next target of regulators, citing officials close to the case who were not authorised to speak publicly.
Barclays’ huge payout does not exempt the bank or its staff from criminal prosecution.
Later this week chairman of the Federal Reserve Ben Bernanke will appear before two powerful congressional committees – the Senate Banking Committee and the House Financial Services Committee.
US Treasury Secretary Timothy Geithner is also expected to appear before the Senate Banking Committee in the coming weeks to face similar questions.
Last Friday the New York Federal Reserve, which Mr Geithner was in charge of at the time, released a trove of documents showing that Barclays informed the regulator about its concerns over Libor manipulation as far back as August 2007.
The documents also showed that by June 2008 Mr Geithner was concerned enough to formally contact Bank of England Governor Mervyn King to report the problems relating to Barclays and other banks, and made recommendations to shore up the Libor setting process.
The Bank passed the email on to the British Bankers Association (BBA), which, according to Mr King, assured both the Bank and the NY Fed that it would take on board the recommendations.
The BBA has responsibility for overseeing Libor.
It is not yet clear how it dealt with the information from the Fed.