Revisiting Crimes of the Powerful by unknow

Author:unknow
Language: eng
Format: epub
ISBN: 9781351815352
Goodreads: 41544701
Publisher: Routledge
Published: 2018-06-13T00:00:00+00:00

Make no mistake: the manipulation of Libor was also about accumulating capital and expanding the net wealth of UBS.

On 11 December 2012, the U.S. Department of Justice (DOJ) announced that HSBC Holdings, a British multinational banking and financial services company based in London and ranking as the fourth-largest bank in the world with total assets of $2.67 trillion, had agreed to forfeit $1.25 billion and to pay $665 million in civil penalties for violating the Bank Secrecy Act, the International Emergency Economic Powers Act and the Trading With the Enemy Act. It is also worth noting that in the settlement, the DOJ had also agreed not to criminally prosecute HSBC for alleged terrorist financing. One week later, UBS, Switzerland’s biggest bank, settled with U.S., UK and Swiss regulators for a sum of $1.5 billion for manipulating interest rates and for criminal charges against two former traders. The global investigation of these traders involved more than a dozen banks and brokers (Brush and Mattingly 2012).

In fact, regulators found that the Zurich-based bank made “more than 2,000 requests to its own rate submitters, traders at other banks and brokers to manipulate rate submissions through 2010” (Ibid.). According to the Financial Services Authority, there were at least 45 bank employees, including some managers, who knew of the persuasive practice and another 70 people who were included in open chats and messages where attempts to manipulate the Libor and Euribor were discussed. In 2011, Japanese regulators had also temporarily suspended some of UBS and Citigroup’s transactions “after finding that both banks had attempted to influence Libor rates and the related Tokyo Interbank Offered Rate” (O’Toole 2012).

Besides these multinational banks, other global banks were involved in this kind of collusion and submission of fraudulent interbank interest rates. Back in March 2011 the Wall Street Journal reported that U.S. regulators were investigating Bank of America and Citigroup for manipulating the Libor. Eleven months later, in February 2012, the U.S. Department of Justice announced that it was launching a criminal investigation into widespread Libor abuse. In July 2012, the UK Serious Fraud Office announced that it too was opening a criminal investigation into Libor. Not only was the UK looking into BCS’ fraudulent submission rates but also those of 20 other major banks.

During the same month and year, the Canadian Competition Bureau (CCB) announced that it was carrying out an investigation into the Canadian branches of the RBS as well as HSBC, Deutsche Bank, JPMorgan Bank and Citibank for “price fixing” around the yen-denominated Libor rate. A federal prosecutor for the CCB stated that interest rate derivative traders “at the participant banks communicated with each other their desire to see a higher or lower yen LIBOR to aid their trading positions” (Beltrame 2012).

By the end of 2015, more than a half-dozen banks had paid out more than $10 billion to settle charges with regulators for fraudulent rate submissions. However, in the face of all the accusations against dozens of multinational or global banking giants, and in the

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