Posted by nesaraaustralia ⋅ November 11, 2012 ⋅ Leave a Comment
By Lindsay Fortado - Nov 10, 2012 1:47 AM GMT+1000
The Royal Bank of Scotland Group Plc (RBS) headquarters in London.
U.K. prosecutors are poised to arrest former traders and rate setters at UBS AG (UBSN), Royal Bank of Scotland Group Plc (RBS) and Barclays (BARC) Plc within a month for questioning over their role in the Libor scandal, a person with knowledge of the probe said.
Police, directed by Serious Fraud Office
prosecutors, will act in the next month, said the person, who declined
to be identified because the matter isn’t public. Arrests in the U.K.
are made early in investigations, allowing people, who may not be
charged, to be questioned under caution.
The SFO has 40 people working on the probe into manipulation of the London interbank
bank offered rate, a benchmark for financial products valued at $360
trillion worldwide, and has involved the City of London Police, said David Green, the agency’s director.
“Significant developments” in the case are coming “in the near
future,” Green said yesterday in an interview at his office in London,
without giving further details and declining to comment on possible
The SFO opened the investigation in July at the request of British
politicians after Barclays was fined a record 290 million pounds ($462
million) for rate manipulation. Regulators across the globe are
investigating claims banks altered submissions used to set Libor in an
effort to benefit traders, or so the lenders would appear financially
The arrests could be temporarily delayed because of disruptions to the SFO’s schedule caused by a move in offices.
Green said the agency is focusing on the most egregious attempts to
manipulate Libor and other related benchmarks. Investigations into
firms, managers, traders and rate setters at lesser offenders will come
Regulators in the U.S. and U.K. are looking into how derivatives
traders and bankers who submitted interest-rate data colluded to rig
benchmarks to benefit their own trades, and whether lenders low-balled
submissions in 2008 to hide their true cost of borrowing. Criminal
probes by the SFO and U.S. Department of Justice are running in parallel
with civil investigations being conducted by the DOJ’s fraud division,
the U.S. Commodity Futures Trading Commission and the U.K. Financial
Barclays spokesman John McGuinness, UBS spokesman Richard Morton and RBS spokesman Michael Strachan all declined to comment.
UBS and RBS are next in line to settle with the regulators, people
familiar with the case have said. Edinburgh-based RBS fired four traders
following an internal probe.
More than 25 people have left UBS after an internal review of
interest-rate manipulation, a person familiar with the matter said. Robert Diamond, who stepped down as Barclays chief executive officer after the fine, said 14 traders were involved in wrongdoing at the bank.
The SFO has “hoovered up all the stuff from the FSA and loaded it
onto our computers,” Green said. It has also received evidence from the
U.S. Federal Bureau of Investigation and some of the banks.
The SFO is cooperating with the DOJ on a request for access to
information from the U.K., Green said. That could include U.S.
investigators sitting in on SFO interviews with suspects, or having
access to evidence the agency has gathered.
The request, which came under a mutual legal assistance treaty, or
MLAT, was initially stalled while the SFO sought to get up to speed on
the case. The DOJ submitted an amended request in recent months with
“very substantial” information sought, Green said.
‘Anxious to Execute’
“Obviously when we first received it there was anxiety that execution
of the request could mop up SFO resources,” he said. “We are anxious to
execute it” and will “certainly” assist, he said.
Green said the agency, while working closely with the DOJ, is also
competing to bring charges first in order to handle the prosecution of
any British citizens in the U.K., reducing the chance of extradition.
The SFO’s previous director, Richard Alderman, declined to get involved in the case. Green took over as director in April.
The agency, which is considering bringing charges of conspiracy to
defraud, is unlikely to conduct raids on banks in the case, Green said.
It’s mostly targeting individuals and are also considering whether they
can bring charges against firms. In order to do so, the SFO would have
to prove that a “controlling mind” at a bank knew of the behavior, Green
The agency doesn’t have any cooperating witnesses yet in the case,
but that’s a possibility, he said. The DOJ is working with several and
is basing part of their case on the evidence gained from them, a person
familiar has said previously.
Jane de Lozey and Matthew Wagstaff are overseeing the Libor
investigation, with staff from external consultancy, accounting and law
firms, and with two people from the Crown Prosecution Service, Green said. The Treasury has earmarked 3.5 million pounds for the SFO’s Libor investigation.
To contact the reporter on this story: Lindsay Fortado in London at firstname.lastname@example.org
To contact the editor responsible for this story: Anthony Aarons at email@example.com
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