A state investigation into whether some of the world's biggest banks manipulated key global interest rates has widened to 16 institutions, according to a source familiar with the matter.
New York state Attorney General Eric Schneiderman issued subpoenas to nine banks in late August as part of an investigation into alleged manipulation of the London Interbank Offered Rate, or Libor, according to the source, who was not authorized to speak publicly.
The Libor process generates rates, based on a survey of banks, that are used as benchmarks for roughly $10 trillion of loans and some $350 trillion of derivatives.
In June, U.K. bank Barclays (BCS) admitted to manipulating Libor to appear stronger during the financial crisis and to benefit its traders' positions. As part of a settlement with U.S. and U.K. regulators, the bank agreed to pay $453 million.
Related: Explaining the Libor interest rate mess
Since then, other banks involved in setting Libor have come under scrutiny. Schneiderman previously subpoenaed Barclays, Citigroup (C), Deutsche Bank (DB), HSBC (HBC), JPMorgan (JPM), Royal Bank of Scotland (RBS) and UBS (UBS) in July and early August.
The newly disclosed subpoenas were sent to Bank of America (BAC), Credit Suisse (CS), Societe Generale (SCGLF), Royal Bank of Canada (RY), Rabobank, Norinchukin Bank, Lloyds Banking Group PLC (LLDTF), Bank of Tokyo Mitsubishi UFJ and WestLB.
A spokesman for U.K.-based Lloyds said in a statement that the bank was "assisting various regulators in their ongoing investigations. And a spokesman for WestLB, now known as Portigon, said the firm "continue[s] as always to help the regulators in any enquiries they may have."
Royal Bank of Canada spokeswoman Rina Cortese said RBC had "determined that our Libor submissions reflected our cost of funds," meaning the bank did not attempt to manipulate the rate.
The other banks either declined to comment or did not immediately respond to requests for comment.
Schneiderman is leading the investigation along with Connecticut state Attorney General George Jepsen. The two have also been in contact with a number of their counterparts in other states.
"The investigation can now be described as a large, well coordinated multistate investigation that includes Attorneys General throughout the U.S.," Jaclyn Falkowski, a spokeswoman for Jepsen, said in a statement. "A primary focus of the multistate's [sic] investigation is to identify whether state and municipal issuers with financial instruments pegged to Libor and other benchmark interest rates have been harmed by the alleged conduct and, if so, to seek recovery of those taxpayer funds."
The Baltimore city government is already the lead plaintiff in a class-action suit against Barclays and other banks alleging that the city lost money due to Libor manipulation. The comptroller of Nassau County in New York has claimed the alleged fraud might have cost his county as much as $13 million on deals related to $600 million of outstanding bonds.
Federal authorities are also investigating the matter, as are some officials overseas. All told, analysts believe the banks implicated in the scandal will rack up billions in losses from pending litigation and regulatory penalties.
CNNMoney's Catherine Tymkiw contributed reporting.
