Recent reports reveal that UBS, Bank of America (BOA), and Citigroup are under investigation by the SEC and U.S. Department of Justice for allegedly manipulating the London Interbank Offered Rate, known as LIBOR. LIBOR is the most widely used benchmark for short-term interest rates.

Manipulation of Libor is hugely consequential since it is a benchmark for over $350 trillion in derivatives and bonds. LIBOR is also a reference point used in setting interest rates in $10 trillion in adjustable rate loans. Concerns about the integrity of LIBOR quotes surfaced in 2008.

UBS buried the investigation in its 430 page annual report which was released on March 15, 2011. The Swiss bank has about 6,800 financial advisors who operate through UBS Financial Services Inc.

We will be watching these developments unfold with interest—no pun intended.