Criminal Investigation Underway in Huge British Banking Scandal
The U.K. Serious Fraud Office opened a criminal probe into the attempted rigging of interest rates that led to a record fine against Barclays Plc (BARC), adding to pressure on banks already under investigation by regulators around the globe.
SFO Director David Green said he had decided to “accept the Libor matter for investigation” in an e-mailed statement July 6.
Politicians including Chancellor of the Exchequer George Osborne and Opposition Labour leader Ed Miliband called for a criminal probe after Britain’s second-biggest bank was fined $451 million two weeks ago in the U.K. and U.S. for submitting false Libor rates. Chief Executive Officer Robert Diamond and Chief Operating Officer Jerry Del Missier resigned over the scandal.
Barclays spokesman Giles Croot didn’t immediately respond to a voice-mail seeking comment.
The SFO joins the U.S. Department of Justice in criminally investigating how derivatives traders and rate submitters colluded to rig interbank offered rates. The U.K. Financial Services Authority is seeking civil penalties against banks and has said its criminal powers don’t include Libor rigging.
As part of the U.S. and U.K. settlements, Barclays admitted rigging the London interbank offered rate, or Libor, as well as Euribor, its equivalent in euros, as early as 2005. In testimony to Parliament last week, Diamond apologized and said 14 Barclays traders were involved.
Citigroup Inc. (C), Royal Bank of Scotland Group Plc, UBS AG, ICAP Plc (IAP), Lloyds Banking Group Plc (LLOY) and Deutsche Bank AG (DBK) are among the firms regulators are investigating. About 18 banks are surveyed as part of the process of determining Libor rates.