The U.K. Serious Fraud Office and City of London Police made the first three arrests in global probes into tampering with benchmark interest rates including the London interbank offered rate.
The three men arrested, ranging in age from 33 to 47, are all British nationals living in the U.K., the SFO said in an e-mailed statement. The agency and police also searched three homes in Surrey and Essex.
Global authorities are investigating claims that more than a dozen banks altered submissions used to set benchmarks such as Libor to profit from bets on interest-rate derivatives or make the lenders’ finances appear healthier. Swiss lender UBS AG is expected to face a fine as early as this week that may surpass the record $466 million paid in June by Barclays Plc, the U.K.’s second-biggest bank, to settle claims it attempted to manipulate Libor…
Libor, a benchmark for more than $300 trillion of financial products worldwide, is derived from a survey of banks conducted each day on behalf of the British Bankers’ Association in London. The rates help determine borrowing costs for everything from mortgages to student loans…
Criminal probes by the SFO and U.S. Department of Justice are running in parallel with civil investigations being conducted by the Justice Department’s fraud division, the U.S. Commodity Futures Trading Commission and the U.K. Financial Services Authority.
Anyone think the brave conservatives in our Congress will stand up and encourage prosecution of this criminal fraud?
Here we have an international conspiracy that manipulated rates affecting everything from student loans and mortgages to funding for corporate expansion. The investigating bodies accept as a premise they will not charge the management of these banks as responsible for the crime – only individuals will take the fall for the crime. The banks will pay fines. If the fines are big enough to affect their profit margins, they will pass the cost along to customers.