Newspaper article International New York Times

British Regulator Reveals Libor Warnings ; F.C.A. Announces Plans to Charge 2 Individuals in Rigging of Interbank Rate

Newspaper article International New York Times

British Regulator Reveals Libor Warnings ; F.C.A. Announces Plans to Charge 2 Individuals in Rigging of Interbank Rate

Article excerpt

The Financial Conduct Authority said Monday that it had warned two individuals that it planned to charge them for misconduct related to the rigging of Libor.

The Financial Conduct Authority, one of Britain's financial regulators, made public on Monday its plan to charge two people for misconduct related to rigging the London interbank offered rate, or Libor.

It is the first time that the agency has used its newly minted authority to issue such warnings and the first time the regulator has taken action against individuals in the wide-ranging Libor investigation. The warning is similar to the Securities and Exchange Commission's Wells notice, which notifies individuals or institutions in the United States that the agency plans to file civil charges against them.

Unlike the S.E.C., however, the British regulator is not allowed to identify the individuals or the banks involved.

Regulators and prosecutors, including those in Japan, the Netherlands, the United States and Britain, are investigating more than a dozen banks on the suspicion that they rigged benchmark interest rates including Libor in a number of different currencies in an attempt to inflate trades in more than $400 trillion of financial products like derivatives and mortgages.

Banks have paid billions of dollars in fines related to the investigations into the manipulation of benchmark interest rates. The Justice Department in the United States and the Serious Fraud Office in Britain have leveled criminal charges against at least 10 people. More charges are expected.

The F.C.A., which oversees market regulation, has fined five institutions 426 million pounds, or about $694 million, with UBS topping the list with a penalty of Pounds 160 million. In December, European Union antitrust regulators fined six banks, including Deutsche Bank and Citigroup, a record $2.3 billion for manipulating interest rates linked to Libor and Euribor, the European interbank offered rate.

At the time, Joaquin Almunia, the European commissioner responsible for competition, said, "What is shocking about the Libor and Euribor scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other. …

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