Bloomberg News

U.S. Libor Charges Said to Go Beyond Barclays Traders

July 26, 2012

Libor Charges in U.S. Said to Target More Than Barclays Traders

The Barclays Capital office on June 26, 2012 in New York. Photographer: Stan Honda/AFP/Getty Images

U.S. prosecutors are preparing to file charges this fall against traders from several banks involved in a bid-rigging scheme to manipulate Libor rates, not just Barclays Plc (BARC), according to a person familiar with the case.

The charges against individuals, which would probably be filed by October according to the person, center on alleged rate-fixing activity that goes beyond the conduct described in last month’s settlement between Barclays and regulators in the U.S. and U.K.

Initially prosecutors were aiming for as soon as Labor Day, the U.S. holiday on Sept. 3, to charge traders who illegally manipulated Libor rates.

Barclays was fined $450 million in late June by U.S. and U.K. regulators for submitting false Libor rates. The public and political reaction to the Barclays settlement -- which resulted in the resignation of the bank’s chairman, chief executive and chief operating officer -- generated interest from other government agencies and Congress.

The additional interest in Libor has altered the trajectory of the U.S. investigation, said the person, who asked not to be identified because the matter is confidential.

Justice Probe

The Justice Department investigation of criminal activity related to Libor is moving on a parallel course with civil probes of the banks being conducted by the U.S. Commodity Futures Trading Commission, the Securities and Exchange Commission and U.K. regulators, including the Serious Fraud Office. Libor is short for London Interbank Offered Rate, a benchmark for short-term interest rates.

Adora Andy, a Justice Department spokeswoman, declined to comment.

So far, almost 20 traders have been identified in regulatory filings, media reports or by the banks as having been under investigation. Another 14 traders were mentioned, but not identified by name, in the Barclays settlement.

Federal prosecutors are focusing on higher-ranking individuals who allegedly directed the bid-rigging efforts, rather than lower-ranking individuals who were following orders, according to the person familiar with the case.

To contact the reporter on this story: Greg Farrell in New York at gregfarrell@bloomberg.net

To contact the editor responsible for this story: Patrick Oster at poster@bloomberg.net


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