Libor Manipulation Scandal: Britain's Serious Fraud Office Arrests 3 In Interest Rate

[TruthOut10]

LONDON—Britain's Serious Fraud Office says three people have been arrested as part of an investigation of the manipulation of a key market interest rate.
The three men—aged 33, 41 and 47—were not named. The office said Tuesday all are British nationals.
The fraud office opened its investigation in July after Barclays was fined $435 million by American and British agencies for creating false reports on its borrowing costs between 2005 and 2009, specifically related to the London interbank offered rate, or LIBOR.

UK fraud office arrests 3 in LIBOR rate probe - San Jose Mercury News

 

[oldfart]

LONDON—Britain's Serious Fraud Office says three people have been arrested as part of an investigation of the manipulation of a key market interest rate.
The three men—aged 33, 41 and 47—were not named. The office said Tuesday all are British nationals.
The fraud office opened its investigation in July after Barclays was fined $435 million by American and British agencies for creating false reports on its borrowing costs between 2005 and 2009, specifically related to the London interbank offered rate, or LIBOR.

UK fraud office arrests 3 in LIBOR rate probe - San Jose Mercury News

Come on guys; the manipulation only affected about $550 TRILLION of loans. What's ten or fifteen basis points applied to a base like that?

 

[waltky]

Libor's one degree of seperation to the Aurora & Newtown shootings?...

UBS traders charged, bank fined $1.5 billion in Libor scandal
20 Dec.`12 - U.S. prosecutors charged two former UBS traders on with taking part in a multi-year scheme to manipulate Libor and other benchmark interest rates, making them the first individuals to be criminally accused in the international scandal.

The charges against the two traders, Tom Hayes and Roger Darin, resulted from a broad investigation into the activities of more than a dozen banks in the setting of prices for Libor and related rates. A day after UBS agreed to pay $1.5 billion to regulators in the United States, UK and Switzerland, the Hong Kong Monetary Authority (HKMA) said the bank was being probed over its submissions of interbank rates there, raising the risk it could face more fines. In settling with U.S., UK and Swiss authorities, UBS not only paid one of the largest fines ever imposed on a bank, its Japanese subsidiary pleaded guilty to one U.S. criminal count of fraud relating to manipulation of benchmark rates, including the yen Libor. The Japanese subsidiary is where authorities allege much of the manipulation of interest rates occurred, as employees of the bank looked to profit on derivatives trades linked to the rates.

The bank could have more trouble in store in Asia. HKMA, Hong Kong's de facto central bank, said in a statement early Thursday in Asia that it had received information from overseas regulatory authorities about possible misconduct by UBS involving submissions for the Hong Kong Interbank Offered Rate (Hibor) and other reference rates in the region. UBS is the second large international bank to reach a settlement with U.S. and UK authorities, and other settlements are expected to follow in the next few months. In June Barclays Plc agreed to pay $453 million in fines to settle allegations its employees attempted to manipulate Libor rates.

The investigation and it findings - that attempts to manipulate Libor were fairly widespread in the banking industry - have cast doubts on the reliability of Libor as a benchmark for setting interest rates. The probe has also raised questions about why bank regulators were slow to uncover the manipulation, which Reuters previously reported dated back to at least the late 1990s. "The bank's conduct was simply astonishing," Lanny Breuer, who heads the U.S. Justice Department's criminal division, said in announcing the settlement. "Make no mistake - for UBS traders, the manipulation of Libor was about getting rich."

While the bank will hope that the $1.5 billion settlement with regulators in the U.S., UK and Switzerland will draw a line under its penalties for its role in Libor manipulation, it remains at risk of action from regulators elsewhere for possible rate rigging. As well as Hong Kong, there is an ongoing investigation in Singapore into the possible manipulation of benchmark lending and foreign exchange rates. "We continue to work closely with various regulatory authorities to resolve issues relating to the setting of certain global benchmark interest rates. As we are currently in active discussions with these authorities, we cannot comment further," said a spokesman for UBS in Hong Kong.

CRIMINAL CHARGES

See also:

No Viable Connection Between Peter Lanza & US Senate LIBOR Hearings
December 17, 2012 - It seems the alternative media has been caught in purveying disinformation concerning the recent shootings in Connecticut, the father of one of the shooters, Peter Lanza and the London Interbank Offered Rate (LIBOR) scandal. In fact, research proves that Lanza has no ties to the LIBOR debacle, nor is there documentative evidence that Lanza is scheduled to testify at an up-coming hearing regarding the technocratic scheme.

One alternative media source claims that: “Peter Lanza was scheduled to testify in the ongoing global LIBOR scandal. In what could only be described an amazing coincidence, the father of Colorado Batman shooter James Holmes, Robert Holmes, was also a LIBOR witness in his position with FICO.” No citation links are provided to corroborate this assertion – simply the illusory connection is made which seems to be enough to shift an entire social meme and cause distraction from the actual factual evidence emerging about the shooting; as well as the implications of this event with regard to the 2nd Amendment.

The rumor circulating the internet is based on assertions without evidence, which is being paralleled with the assumptions made about James Holmes’ father and another alleged connection to LIBOR simply because Holmes’ father is a computer economist at FICO. In fact, a known disinfo agent was the originator of the Holmes/LIBOR connection, although the alternative media masses continue to repeat the lie without checking their facts. Another alternative media source has ties to purveying the rumor as fact without providing evidence with their social networking site as well as commentary that misleads the public in a thread at the bottom of an article concerning the recent shootings at Sandy Hook elementary.

According to Lanza’s Linkedin page, Lanza has worked “closely with many of the preeminent partnership tax advisors in the United States on a daily basis.” Currently Lanza is employed as the tax director and vice president of taxes at GE Energy Financial Services (GE-EFS).

Lanza’s responsibilities at GE-EFS include:

 

[Swagger]

There's a reason that most of Britain refers to the SFO as the "Serious Farce Office." That reason being is because it's possibly the UK's most toothless tiger.

When we - on both sides of the Atlantic - see words like "fined", "lack of communication" and "financial mismanagement" replaced with terminology along the lines of 'blatant criminality', 'gross dishonesty', 'corporate greed' and 'board members prosecuted', then I might lend some faith to these presently pathetic "inquiries".

I mean, if I manipulated the markets in my favour from my PC I'd be looking at thirty years, not a limp slap on the wrist (followed by a conspiratorial wink).

 

[waltky]

Gary Gensler says banks need a reference rate "based on facts not fiction"...

Libor setting 'still not clean' despite scandal
21 February 2013 - The way that the key Libor interest rate is set in the UK is still not clean and free of fraud, according to a top US regulator. "We have a lot more work to do," Gary Gensler, chairman of the Commodity Futures Trading Commission, told the BBC in London.

He suggested that the rate was often "completely made up". A number of banks have been fined hundreds of millions of pounds for rigging the lending rate. Mr Gensler is in London to meet officials at the Financial Services Authority, the City watchdog. Libor, which is set in London, is meant to reflect the average rate that banks pay to lend to each other and is used to benchmark everything from car loans and mortgages to complex financial transactions around the world. Speaking of the scandal, Mr Gensler spoke of "pervasive rigging" and said authorities could not guarantee the rate is fraud-free, but refused to criticise the FSA or suggest that setting the rate should be moved to the US.

He also labelled the FSA a "terrific partner", as the FSA defended itself against criticism of its role in the Libor scandal by MPs. The Libor scandal emerged in June last year when UK and US authorities fined Barclays £290m for fixing the key inter-bank interest rate. Since then, Swiss bank UBS and Royal Bank of Scotland have been given fines of £940m and £390m, respectively. According to the CFTC, which hit RBS with a £208m fine, RBS made hundreds of attempts to manipulate the rates and succeeded on a number of occasions.

'Making it all up'

Libor - the London inter-bank offered rate - is a benchmark interest rate set each day by the British Bankers' Association. It is based on estimates received from 16 major international banks based in London of how much they must pay in order to borrow cash from other banks. Barclays, for example, submitted lower rates during the financial crisis to reduce the appearance that it was having trouble raising funds, as a higher cost of borrowing indicates other banks are concerned about its financial position.

Mr Gensler compared the manipulation of rates to an estate agent trying to sell you a house. "They are trying to reference the price of the houses in the neighbourhood [when] there have been no transactions in the neighbourhood and furthermore, the agent is not willing to share the data and is often just making it all up," he said. The BBA told the BBC it would not comment on Mr Gensler's comments but said: "The BBA has strongly stated the need for greater regulatory oversight of Libor". It added that it was working closely with the government and regulators to change the system. A government-commissioned review suggested taking the responsibility away from the BBA and placing it in the hands of an outside authority, such as a commercial body or an industry group.

The FSA responds