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Saturday, July 14, 2012

NY Times: Possible Criminal Charges in LIBOR Scandal

by Calculated Risk on 7/14/2012 09:40:00 PM

From the NY Times DealBook: U.S. Is Building Criminal Cases in Rate-Fixing

The [Justice Department]’s criminal division is building cases against several financial institutions and their employees, including traders at Barclays ... The prospect of criminal cases is expected to rattle the banking world and provide a new impetus for financial institutions to settle with the authorities. The Justice Department investigation comes on top of private investor lawsuits and a sweeping regulatory inquiry led by the Commodity Futures Trading Commission.

The multiyear investigation has ensnared more than 10 big banks in the United States and abroad. With the prospects of criminal action, several firms, including at least two European institutions, are scrambling to arrange deals ...

According to people briefed on the matter, the Swiss bank UBS is among the next targets for regulatory action. ...

in April 2008, a senior enforcement official at the Commodity Futures Trading Commission, Vincent McGonagle, opened an investigation. ... At first the case stalled as the agency waited months to receive millions of pages of documents when Barclays pushed back ... By the fall of 2009, the trading commission received a trove of information, providing a broad view into the wrongdoing.
The questionable reliability of LIBOR was widely discussed in early 2008 - and iwe are finally seeing fines and possibly criminal charges.

Summary for Week Ending July 13th
Schedule for Week of July 15th