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Update on LIBOR cases

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Has been rather quiet lately on the Libor front, other than six traders have been acquitted after a mere one day of jury deliberations. A few updates:

2/12 – The Wall Street Journal – Last Wave on LIBOR: CFTC Likely to Charge Multiple Banks for Rate Rigging – Article cites sources saying the CFTC and British Financial Conduct Authority will be likely bringing civil charges in the next few months against Citigroup and HSBC. FCA has dropped an investigation of J.P. Morgan Chase but CFTC still has that investigation open.

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Written by Jim Ulvog

February 18, 2016, 7:00 am at 7:00 am

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Deutsche Bank ponies up $2.5B for cooking Libor; industry wide settlements approaching $9B.

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The dubious distinction of drawing the largest fine for manipulating Libor goes to Deutsche Bank. Their total tab is now $3.5B. That leaves UBS in a distant second place at $1.6B.

Check out two articles on April 22:

Deutsche Bank will pay slightly over $2.5 billion to settle up for manipulating Libor, Eurbor, and Tibor (Tokyo interbank). Several specific Directors and VPs will be fired.

A subsidiary company in Britain will plead guilty to violating American criminal laws.

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Written by Jim Ulvog

April 23, 2015, 8:33 am at 8:33 am

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Deutsche Bank in final negotiations for their Libor manipulation. If they settle at $1.5B, it would bring cumulative Libor fines to $7.6B.

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Leaks to Dealbook suggest Deutsche Bank could have a settlement in May with DoJ, NY DFS, CFTC and Financial Conduct Authority in London. Amount of settlement is looking to be over $1.5B and involve a guilty plea to a criminal charge by a British sub of the bank.

Report is Deutsche Bank Nears Plea Deal Over Libor Manipulation.

Several comments in the article refer to ‘discounts’ given to the first-to-settle, which was UBS. Also comments that the last to settle pays a premium.

I’ve started tracking the Libor and Forex settlements in a spreadsheet.  There are too many banks dealing with too many regulators on too many issues to keep everything straight in my little brain.  Good infographic on settlements from WSJ here.

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Written by Jim Ulvog

April 10, 2015, 7:00 am at 7:00 am

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FDIC sues 16 big banks claiming manipulation of LIBOR

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The FDIC filed a suit against a host of big banks claiming they manipulated the LIBOR rates thus harming 38 banks that were taken over by the FDIC.

Included are lots of names you’ll recognize: Bank of America, Citigroup, Credit Suisse Group,  HSBC, Barclays, JPMorgan Chase, and RBS. They also included the British Bankers’ Association which owned and managed LIBOR.

Even a few hours after the news broke, the reports I’ve read are only a couple of paragraphs long. Not much background. Here’s a few articles to read, if you wish:

The case is 14-cv-01757, Southern District of New York, in case I want to look it up later.

Written by Jim Ulvog

March 14, 2014, 14:21 pm at 2:21 pm

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EU issues fines for rate rigging of Euribor and Yen Libor, cousins of Libor

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The European Union levied fines on multiple banks for manipulating Euribor and Yen Libor. Those are count parts to Libor. Penalties based on legal concept of operating an illegal cartel.

Money Beat provides a recap in The European Union’s Benchmark Fines: A Breakdown: Read the rest of this entry »

Written by Jim Ulvog

December 4, 2013, 13:56 pm at 1:56 pm

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Dutch bank fined over $1B for manipulating Libor

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Rabobank, based in Holland, will pay a 774M Euro fine, or about $1.065 billion, to U.S. and European regulators.  That according to a Reuters report today:  Dutch Rabobank fined $1 billion of Libor scandal.

Regulators in Japan forced Rabobank to increase their compliance staff in Japan after the bank was caught trying to manipulate the Yen Libor.

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Written by Jim Ulvog

October 29, 2013, 13:12 pm at 1:12 pm

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Charges filed against three traders in LIBOR fiasco – A new banking mess in manipulating energy prices

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The U.K.’s Serious Fraud Office charged two brokers yesterday for their role in allegedly rigging Libor rates.

A third trader was charged last month. All three were arrested in England last December. This third trader was charged in the U.S. in December.

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Written by Jim Ulvog

July 17, 2013, 10:25 am at 10:25 am

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Possible criminal charges this summer against individuals in LIBOR rate fixing scandal

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The Wall Street Journal reports in Criminal Cases Loom in Rate Rigging that criminal charges may be brought against individuals who worked at Barclay. Charges could be filed this summer (2013) but the investigation is going slow so the timeline could slip.

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Written by Jim Ulvog

June 8, 2013, 8:06 am at 8:06 am

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Leaks: 3 more big banks may settle Libor manipulation cases by end of summer – also good infographic

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Written by Jim Ulvog

February 28, 2013, 21:18 pm at 9:18 pm

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RBS settles LIBOR manipulation case with $610M fine and one guilty plea

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Royal Bank of Scotland will pay $610M in fines. Their subsidiary in Japan will plead guilty to one criminal count of fraud in the U.S.

This parallels the settlement UBS reached, which I discussed earlier – UBS settles LIBOR manipulation claims for $1.5B and one guilty plea.

Summary findings from CFTC press release PR6510-13: Read the rest of this entry »

Written by Jim Ulvog

February 6, 2013, 9:25 am at 9:25 am

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UBS settles LIBOR manipulation claims for $1.5B and one guilty plea. Looks like some individual prosecutions may follow.

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By agreeing to the settlement, UBS also acknowledges that several dozen traders, managers, and senior managers tried to manipulate multiple rates, including the Yen Libor, Euribor, and 4 currencies of the Libor index.  Their subsidiary in Japan will plead guilty to one felony charge in the U.S.

This from multiple media reports. See especially the Wall Street Journal article, UBS to Pay $1.5 Billion to Settle Libor Charges (behind paywall).

One obscure part of the story may turn out to be the biggest – there may be individual prosecutions in the near future

Update:  The U.S. Justice Department has unsealed formal charges against two former UBS employees.  You can read multiple news reports, but can start at the WSJ’s Two Former UBS Traders Charged in Libor Probe, which says:

The former traders, … , who lives in England, and …  a resident of Switzerland, were both charged with conspiracy, the Justice Department said. 

Mr. … was also charged with wire fraud and price fixing.

A quick summary from the WSJ:

As part of the deal, UBS acknowledged that dozens of its employees were involved in widespread efforts to manipulate the London interbank offered rate, or Libor, as well as other benchmark rates, which together serve as the basis for interest rates on hundreds of trillions of dollars of financial contracts around the world. UBS’s unit in Japan, where much of the attempted manipulation took place, pleaded guilty to one U.S. count of fraud

The British regulator, Financial Services Authority, was able to specifically identify over 2,000 attempts to manipulate the rate with knowledge and involvement of at least 45 traders and managers.

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Written by Jim Ulvog

December 19, 2012, 8:48 am at 8:48 am

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Settlement of $1.5B possible for UBS over allegedly playing games with LIBOR. And maybe some individual criminal indictments.

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The Wall Street Journal reports $1.5B is the expectation for a settlement next week.  See their article A Shadow Over Banks as UBS Nears Deal.

(Behind paywall, so either grab yesterday’s paper quick or get an online subscription. Or do both.)

Criminal charges?

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Written by Jim Ulvog

December 18, 2012, 6:59 am at 6:59 am

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Euribor, cousin of Libor, may have been cooked too

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This was my depressing reading at lunchtime:  Banking Industry Squirms Over European Rate Probe, in today’s Wall Street Journal.  

Oh great.  Looks like Euribor has been gamed by the big banks (pronounced eur-EYE-bore according to WSJ).

The article reports:

The European Union is expected soon to accuse multiple banks of attempted collusion in the setting of Euribor, according to people briefed on the probe.

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Written by Jim Ulvog

December 10, 2012, 13:26 pm at 1:26 pm

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Q: If LIBOR fiasco is a world class scandal, then where were the regulators? A: They knew all along.

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We are now supposed to think that cooking the LIBOR index is the crime of the century. Yet U.S. and U.K. regulators knew of it in 2007 and 2008. If this is now considered a horrid crime, then why didn’t the regulators do something about it at the time?

The nonchalant reaction of the New York Fed is described in The Wall Street Journal’s editorial New York Fed to Barclays: “Mm hmm”.

Here’s what the Fed says they did:

In June 2008, Timothy Geithner, then head of the New York Fed, sent Bank of England Governor Mervyn King two pages of recommendations for “Enhancing the Credibility of LIBOR” and wrote that he would be “grateful if you would give us some sense of what changes are possible.”

This is not exactly the language of a regulator who has just uncovered what we’re now told is the financial crime of the century.

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Written by Jim Ulvog

July 18, 2012, 8:28 am at 8:28 am

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Let’s keep an eye on the role of regulators in the LIBOR fiasco

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In addition to the now-denied wink and nudge from Paul Tucker to Barclays that their LIBOR rates didn’t need to always be so high, the New York Fed was told repeatedly of the possible problems with LIBOR.

The Washington Post’s article, In 2007, New York Fed was told about problems with Libor, summarizes the communication from Barclays to the NY Fed.

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Written by Jim Ulvog

July 11, 2012, 7:30 am at 7:30 am

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