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Intro: "American prosecutors and European regulators are close to arresting individual traders over the Libor scandal and charging them with colluding to manipulate global benchmark interest rates, according to sources familiar with the investigation."

Barclays, which signed a non-prosecution agreement with US prosecutors, is the first major bank to reach a settlement in the Libor investigation. (photo: Simon Newman/Reuters)
Barclays, which signed a non-prosecution agreement with US prosecutors, is the first major bank to reach a settlement in the Libor investigation. (photo: Simon Newman/Reuters)



US Prosecutors Preparing to Make Libor Arrests in US

By Reuters

23 July 12

 

Sources familiar with investigation say American prosecutors close to arresting individuals over Libor scandal.

merican prosecutors and European regulators are close to arresting individual traders over the Libor scandal and charging them with colluding to manipulate global benchmark interest rates, according to sources familiar with the investigation.

Federal prosecutors in Washington DC have recently contacted lawyers representing some of the individuals under suspicion to notify them that criminal charges and arrests could be imminent, said two sources speaking anonymously.

Defence lawyers representing individuals under suspicion said prosecutors have indicated they will begin making arrests and filing charges in the next few weeks. In long-running financial investigations it is not uncommon for prosecutors to contact defence lawyers for individuals before filing charges to offer them a chance to co-operate or take a plea, the lawyers said.

Alongside the investigation into how traders allegedly sought to influence the London Interbank Offered Rate, or Libor, and other global rates there in an effort by regulators to punish major banks with fines.

"The individual criminal charges have no impact on the regulatory moves against the banks," said a European source familiar with the matter. "But banks are hoping that at least regulators will see that the scandal was mainly due to individual misbehaviour of a gang of traders."

"More than a handful of traders at different banks are involved," said the source.

There are also probes in Europe concerning Euribor, the Euro Interbank Offered Rate.

It is not clear what individuals and banks federal prosecutors are most focused on. A top US Department of Justice lawyer overseeing the investigation did not respond to a request for a comment.

Reuters previously reported that more than a dozen current and former employees of several large banks are under investigation, including Barclays, UBS and Citigroup, and have hired defence lawyers over the past year as a federal grand jury in Washington DC continues to gather evidence.

The activity in the Libor investigation, which has been going on for three years, has quickened since Barclays agreed last month to pay £290m in fines and penalties to settle allegations with regulators and prosecutors that some of its employees tried to manipulate key interest rates from 2005 through 2009.

Barclays, which signed a non-prosecution agreement with US prosecutors, is the first major bank to reach a settlement in the investigation, which also is looking at the activities of employees at HSBC, Deutsche Bank and other major banks.

The Barclays settlement sparked outrage and a series of public hearings in Britain, after which Barclays chief executive Bob Diamond announced his resignation.

The source familiar with the regulatory investigation in Europe said two traders who have been suspended from Deutsche Bank were among those being investigated. A Deutsche Bank spokesman declined to comment.

The Financial Times reported on Wednesday that regulators were looking at suspected communication among four traders who had worked at Barclays, Credit Agricole, HSBC and Deutsche Bank.

Banks also face a growing number of civil lawsuits from cities, companies and financial institutions claiming they were harmed by rate manipulation. Morgan Stanley recently estimated that the 11 global banks linked to the Libor scandal may face £9bn in regulatory and legal settlement costs through 2014.

 

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+32 # Barbara K 2012-07-23 09:02
Great! Let's throw the book at them. It's time for the guilty to pay for what they've done to the citizens. No just a slap on the wrist, fine them for ALL the money they have, put them out of business, and divide up the money with their victims.
 
 
+10 # mdhome 2012-07-23 12:33
I hope they get fined every penny they made in the last ten years and then lock them up for 20 years
 
 
+9 # Feral Dogz 2012-07-23 13:35
Isn't it nice how the Feds and European investigators have tipped off the perps so they have a chance to move their assets to secret accounts(if they haven't already) and skip town for parts unknown? Are they so stupid as not to prepare for the possibility of getting caught?
 
 
+24 # grouchy 2012-07-23 09:33
Next go after our own banks? Finally?
 
 
+1 # The Voice of Reason 2012-07-23 15:32
Never. Money is as money does. This is a clear example of the tired old saying, 'The love of money is the root of all evil.'
 
 
+32 # DPM 2012-07-23 09:34
Only individual traders will, if anyone, go to jail. The "big shots" will remain. The banks will pay some fines and all will be as it was. Cynical? You bet!
 
 
+29 # dkonstruction 2012-07-23 09:38
going after individual traders is one thing but this basically lets the institutions off the hook and the fines that are so are being levied against them amount to a small cost of doing business (the recent HSBC fine, if i'm remembering right) amounted to about 1% of one year's profits....hard ly punishment at all). We need to create a new offense for these folks -- Financial Crimes Against Humanity. Stealing billions hurts millions (if not billions) of people and thus should be considered crimes against humanity. And, since corporations are now people, the sentence for financial crimes against humanity should be death; put these criminal institutions out of business and have the feds seize them (as they do with the assets of small time business owners involved in certain criminal activities) and turn them into publicly owned and controlled financial institutions.
 
 
+12 # HowardMH 2012-07-23 09:56
dk you are dreaming. Until there are 200,000 on capital hill raising some serious hell, nothing is going to happen to anyone on Wall Street.
 
 
+4 # dkonstruction 2012-07-23 11:51
Quoting HowardMH:
dk you are dreaming. Until there are 200,000 on capital hill raising some serious hell, nothing is going to happen to anyone on Wall Street.


HowardMH,

I agree which is why we cannot abandon our dreams. To often, we get mired in the day-to-day crap and lose any grander (utopian?) vision of what kind of country, society and world we want this to be.

What's wrong with saying that corporation's that commit such crimes on such a grand scale should not lose their right to be in business?

I have no illusions that this will be an easy fight and would love to see those 200,000 on capital hiss you reference but i would rather dream than do an Obama and compromise so much even before the fight to the point where any "victory" rings hollow (ala Obamacare).
 
 
+28 # g2g 2012-07-23 09:55
I still do not understand why there is no discussion of using the RICO law and seizing the banks involved as a criminal enterprise. The law was specifically intended to apply to white collar crime, not just the Mafia.
 
 
+10 # HowardMH 2012-07-23 11:04
g2g, you don't get it. It is all about the campaign money, and as long as it continues to flow to the Scum Sucking Politicans hands, NOTHING serious is going to happen against Wall Street.
 
 
+11 # jooberdoober 2012-07-23 10:02
Arrest them all, and strip them of ALL of their ill-gotten gains. Throw them in jail for a very long time.
 
 
+12 # linkedout 2012-07-23 10:12
1. Put them in prison with "that crazy "em-effer" as their cell-mate, until they squeal (perhaps literally!) on their bosses.
2. Put bosses in prison until they squeal.
3. Repeat as needed.
4. Profit!

:)
 
 
+13 # NAVYVET 2012-07-23 10:21
Fine them till it hurts--THEN jail without bail! And put the takings into the treaasury with the stipulation that the monies can be used ONLY for social programs.
 
 
+11 # harbormon 2012-07-23 10:53
"Barclays, which signed a non-prosecution agreement with US prosecutors, is the first major bank to reach a settlement in the LIBOR investigation." This is the key phrase in the entire article, and it was only the caption under the photo...but it says everything.

Having been in the International Banking world for over 25 years, there is no way that the senior management of all these institutions didn't know and understand the consequences of their employee's actions, and in fact, might very well have given them their trading instructions in the first place.

RICO is still an option and it should be a precedent setting action, especially if we want to re-establish any credibility in what's left of the free market system of financial enterprise.
 
 
+6 # CoyoteMan50 2012-07-23 11:26
This is just the tip of the iceberg. The criminality goes all the way to the top.
I expect a few stooges singled out as the "lone wolf perpetrators" who went against their superiors and committed fraud.
In other words another Wall Street/bankster cover up so the real perps get away with more of peoples money.
 
 
+4 # Saberoff 2012-07-23 11:28
Seems all of these suggestions would fit finely under the heading of "Justice." A beautiful word, really and yet, a system America seems to know nothing of.
 
 
+10 # JSRaleigh 2012-07-23 12:41
"More than a handful" means less than 10.

They'll all be little fish & the maximum sentence will be no more than 1 year, before they're all overturned on appeal anyway.

The banks themselves my pay a token fine & promise to do better in the future (which means "Next time, don't get caught!"

Congress might pass some kind of "reform" legislation, but after the President signs the new law it will quietly die because Congress will never fund enforcement.

And the banksters will just figure out some new scam to cheat their customers and everyone else.
 
 
+3 # DPM 2012-07-23 19:44
Maybe we could have the NCAA rule on the banks as they did on Penn State.
 
 
+1 # The Voice of Reason 2012-07-23 20:51
Oh good! The Federal Wrist Slappers are at work!
 
 
+2 # Texas Aggie 2012-07-24 07:26
I have the same feeling about this that I had with Abu Ghraib. It is only some schmuck down in the basement that is going to be penalized while the people who originated the scheme and set it in motion are going to walk. Like Rummy and Cheney, they'll even enjoy continued adulation among their peers.
 

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