[ by Melanie Gretchen ] Did Robert Diamond Jr., the CEO of Barclays, resign on Tuesday over more than outside pressure?  Since the bank agreed to pay $450 million to settle allegations over the rate manipulation of the London interbank offered rate, bank chairman Marcus Agius and COO Jerry del Missier have resigned, furthering speculation.  [See Who's News story, "Barclays CEO Diamond Resigns".]  Upon his resignation, Mr. Diamond attributed his decision on Monday to a desire to avoid spotlight on the bank's past – and he may have good reason. Market Manipulation. Despite initial success following the collapse of Lehman Brothers during the financial crisis, the Bank of England expressed concern that Barclays was reporting high interest rates, a sign of poor health.  In November 2007, one employee asked to take the issue "upstairs," referring to higher firm officials, regulatory documents show.  Christopher Lucas, the finance director at the time, who had a role in overseeing the treasury department back then, was alerted to the activity, a person briefed on the matter said.  However, instead of stopping the practice, a treasury manager instructed the group to continue to "stick within the bounds," according to regulatory documents. A second red flag was raised by another employee, who called the rates "patently false."  Concerns were communicated to "a member of senior management" – and ignored by Mr. Lucas, Mr. del Missier, and Rich Ricci, the investment banking chief. Declining Health. Despite the efforts to depress the rates, the bank's submissions were relatively high, furthering concern speculation about its health.  In the fall of 2008, Paul Tucker, deputy governor of the Bank of England, discussed the high Libor submissions with Mr. Diamond, according to one of the people close to the case. In turn, the CEO relayed the central bank's concerns to his top deputies, at least one of whom told employees to artificially report low rates in line with its rivals, "within the pack," according to people close to the case, who spoke on the condition of anonymity. Blame-Worthiness. Although the CEO faces a British parliamentary committee on Wednesday and forfeited his bonus when the bank disclosed its settlement, Mr. Diamond,  has not been accused of any wrongdoing.  People close to the case contend that he never told anyone to submit bogus rates and never specifically told anyone to influence Libor.  Rather, Mr. Diamond's conversation resulted in "a miscommunication," according to regulatory documents. The four executives forfeited their bonuses upon disclosure of the settlement.  However, none of the other top executives or any of Mr. Diamond's deputies have been accused of wrongdoing either, and while Mr. Diamond has accepted responsibility, he has offered insight into what he knew or what could he could have actively done.

CI Note: Will Mr. Diamond provide answers when he testifies before a British parliamentary committee on Wednesday?  Will emerging evidence of market manipulation prove to be the smoking gun or are there more details?  Could the Barclays scandal succeed in effecting industry change?

For further details, go to [Dealbook, 7/3/12].