Reply With Quote
gfy
g'day
gfy
U.S. Is Building Criminal Cases in Rate-Fixing
As regulators ramp up their global investigation into the manipulation of interest rates, the Justice Department has identified potential criminal wrongdoing by big banks and individuals at the center of the scandal.
The department’s criminal division is building cases against several financial ins utions and their employees, including traders at Barclays, the British bank, according to government officials close to the case who spoke on the condition of anonymity because the investigation is continuing. The authorities expect to file charges against at least one bank later this year, one of the officials said.
The prospect of criminal cases is expected to rattle the banking world and provide a new impetus for financial ins utions 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. Collectively, the civil and criminal actions could cost the banking industry tens of billions of dollars.
http://dealbook.nytimes.com/2012/07/...ate-fixing/?hp
Citigroup May Have Been The Worst American Offender In The Libor Rate Rigging Scandal
The British bank Barclays has been getting the lion’s share of the attention for its role in the LIBOR rate rigging scandal, especially after it paid a $450 million settlement. But as Fortune’s Stephen Gandel noted, Citibank may have been even worse. “In early 2010, two economics professors from UCLA and the University of Minnesota looked at Libor manipulation and found that, at least according to one measure, Citi had misstated its lending rate by more than any other large U.S. bank in the run up to the financial crisis,” Gandel wrote. Citi’s underreported its borrowing costs by a margin 50 percent larger than did Barclays.
http://thinkprogress.org/economy/201...p-libor-study/
Matt Taibbi Dishes on the "Biggest Insider Trading You Could Ever Imagine"
http://www.alternet.org/economy/1563...t;?page=entire
Most of the MSM, and by far most Americans, don't have a clue about LIBOR. That is the real reason that the MSM isn't going very far with this. It is too esoteric for most people on their summer vacations.
I remember what happened to LIBOR in the fall of 2008 and how long it took it to come back down...and at the time, even MY (not overly bright) financial advisor was saying that until LIBOR came back down, no credit would be extended to anyone anywhere.
And it wasn't. Hence, the prolonged housing crisis...It is really a credit crisis...and this is why it isn't over.
UBS's Track Record of Averting Prosecution
As the Justice Department weighs the possibility of criminal charges in the unfolding Libor rate-setting scandal, it may want to consider the record of the Swiss banking giant UBS.
At UBS, a series of immunity, nonprosecution and deferred prosecution agreements in recent years - evidently the government's preferred approach to corporate crime - seems to have had scant, if any, deterrent effect. "It's depressing," Representative Peter Welch, Democrat of Vermont, a member of the House oversight committee, told me this week after we discussed UBS's recent transgressions. "The Justice Department has to decide: Is the day of consent decrees and settlements, where you pay a fine, one passed on to shareholders, are those days over? Are the days of jail time here?"
UBS, one of more than a dozen banks being investigated for manipulating interest rates for their own benefit, is hardly the only major global bank with a record of recidivism. Just this week, HSBC apologized after a Senate committee exposed a pattern of money laundering for "drug kingpins and rogue nations." HSBC, which had been cited twice in the last decade for repeatedly violating money laundering laws, remains under civil and criminal investigation.
It was a rival, Barclays, that set off an international furor when it admitted to a wide-ranging conspiracy to manipulate the London interbank offered rate, commonly known as Libor, which is the benchmark for countless interest rate determinations and an estimated $450 trillion in derivative contracts. It obtained a nonprosecution agreement, in large part because of what the Justice Department called its "extraordinary" cooperation, and agreed to pay American and British authorities a $450 million penalty. Barclays has had its own problems with accusations of money laundering and paid $298 million to settle charges that it cir vented United States prohibitions on funneling money to Iran.
But in many ways, UBS is in a league of its own given its track record for scandals. Should UBS be implicated in the Libor rate-fixing conspiracy, it's hard to imagine a better corporate candidate for a criminal indictment - even though it has already been granted conditional immunity from some aspects of the Libor scandal.
As the Justice Department points out in its guidelines for charging a corporation with a crime: "A corporation, like a natural person, is expected to learn from its mistakes," and "a history of similar misconduct may be probative of a corporate culture that encouraged, or at least condoned, such misdeeds, regardless of any compliance programs. Criminal prosecution of a corporation may be particularly appropriate where the corporation previously had been subject to noncriminal guidance, warnings or sanctions."
UBS, with dual headquarters in Zurich and Basel, traces its roots to 1854. Last year it had more than $26 billion in revenue and nearly 65,000 employees worldwide. It was deemed too big to fail during the financial crisis, and had to be bailed out by the Swiss government after a $50 billion write-down on mortgage-backed securities.
The bank's recidivism seems rivaled only by its ability to escape prosecution:
¶ UBS obtained a deferred prosecution agreement in 2009 for conspiring to defraud the United States of tax revenue by creating more than 17,000 secret Swiss accounts for United States taxpayers who failed to declare income and committed tax fraud. UBS bankers trolled for wealthy clients susceptible to tax evasion schemes at professional tennis matches, polo tournaments and celebrity events. One UBS banker smuggled diamonds in a toothpaste tube to accommodate a client. In return for the deferred prosecution agreement, UBS agreed to pay $780 million in fines and penalties and disclose the iden ies of many of its United States clients. At the same time it settled Securities and Exchange Commission charges that it acted as an unregistered broker-dealer and investment adviser to American clients and paid a $200 million fine. In October 2010 the government dropped the charges, saying UBS had fully complied with its obligations under the agreement.
¶ In May 2011, UBS admitted that its employees had repeatedly conspired to rig bids in the municipal bond derivatives market over a five-year period, defrauding more than 100 municipalities and nonprofit organizations, and agreed to pay $160 million in fines and res ution. An S.E.C. official called UBS's conduct "a 'how to' primer for bid-rigging and securities fraud." UBS landed a nonprosecution agreement for that behavior, and the Justice Department lauded the bank's "remedial efforts" to curb anticompe ive practices.
¶ In what the S.E.C. called at the time the largest settlement in its history, in 2008 UBS agreed to reimburse clients $22.7 billion to resolve charges that it defrauded customers who purchased auction-rate securities, which were sold by UBS as ultrasafe cash equivalents even though top UBS executives knew the market for the securities was collapsing. Seven of UBS's top executives were said to have dumped their own holdings, totaling $21 million, even as they told the bank's brokers to "mobilize the troops" and unload the securities on unsuspecting clients. As Andrew M. Cuomo, who was New York's attorney general then, put it: "While thousands of UBS customers received no warning about the auction-rate securities market's serious distress, David Shulman - one of the company's top executives - used insider information to take the money and run." Besides reimbursing clients and settling with the S.E.C., UBS paid a $150 million fine to settle consumer and securities fraud charges filed by New York and other states. It again escaped prosecution.
There's more - including UBS's prominent role and big losses in the mortgage-backed securities debacle that helped bring on the financial crisis. The federal agency overseeing Fannie Mae and Freddie Mac sued UBS for securities law violations, accusing it of "materially false statements and omissions." The agency is seeking $1 billion in damages. (UBS has denied the charges and the case is pending.) UBS hasn't been charged with any civil or criminal misconduct related to mortgage-backed securities.
In the continuing global interest rates investigations, UBS last summer revealed that it had received conditional immunity from the Justice Department and other authorities. It was shown this leniency even though the Justice Department has pointedly said that Barclays, not UBS, was the first bank to cooperate.
http://mobile.nytimes.com/article;js...?a=950270&f=23
Trader Claims Rate Rigging Scandal Dates Back To 1991
In the Financial Times today, a former trader for Morgan Stanley claims that rigging of the LIBOR rate has been going on since at least 1991. Revelations that LIBOR — a key benchmark for interest rates — was being rigged has caused a wide-reaching scandal in both European and American financial circles, and could lead to criminal charges. Based on conversations he had with other traders, Douglas Keenan wrote, “it seems the misreporting of Libor rates may have been common practice since at least 1991. Although the difference between the reported rate and the actual rate might seem small, the total amount of money involved is material, given that Libor rates affect contracts worth hundreds of trillions.”
http://thinkprogress.org/economy/201...-scandal-1991/
Really? Ignorance didn't seem to stop them on derivatives and credit default swaps.
I think they're carrying the water, once again, for an administration's fair-haired child Timothy Geithner who -- when he had the opportunity -- failed to sound the alarm.
If Geithner looks bad, Obama looks bad. The equation is that simple.
Cost of doing (shady) business... doubt that's much of a dent on their earnings...
nope. not much of deterrent.
http://www.reuters.com/article/2012/...8N34DE20121203Swiss bank UBS AG is expected to pay more than $450 million to U.S. and British authorities to settle claims some of its employees submitted false Libor rates, the New York Times reported.
In June, British bank Barclays Plc was fined $453 million for manipulating Libor benchmark interest rates, becoming the first bank to settle in the ongoing probe, prompting the resignation of its chairman and chief executive.
UBS was the first bank globally to report suspected rate rigging, and has said it has received conditional immunity from some authorities for cooperating in their probes.
A UBS spokeswoman told Reuters that the bank was in the midst of discussions with authorities in the United States and Britain in connection with Libor investigations and has been cooperating fully with the regulatory and enforcement authorities, but gave no further details.
Christopher Hamilton, spokesman for Britain's Financial Services Authority, declined to comment beyond confirming the already established fact that the FSA is investigating UBS.
The Commodity Futures Trading Commission and the U.S. Justice Department, investigating the Libor matter in the United States, could not immediately be reached for comment.
Other banks are also anxious to draw a line under the probe, which is well into its second year. British bank RBS said last month it hopes to reach a settlement on its part in the rate-rigging scandal - likely to result in fines for the bank - and expects to start talks soon.
Morgan Stanley estimated that 11 global banks linked to the Libor scandal could face $14 billion in regulatory and legal settlement costs through 2014.
as usual, ins utions perpetrating fraud on essentially a universal scale settle out of court. no one goes to jail, no one goes out of business.
rob a bank, go to prison; hold up nations, pay a fine.
top stories this morning on NYT mobile home page:
http://mobile.nytimes.com/2012/12/02/blogs/morgan-stanley-trader-faces-inquiry-on-possible-manipulation.xml?f=19
http://mobile.nytimes.com/2012/12/02...gging.xml?f=19
the entire financial sector is reliably assumed to be 100% corrupt until proven otherwise.
that's a bit of a stretch but then again, you're not exactly well-known around here for distinguishing shades between black and white . . .
You're well known sterile, academic debates over inconsequentil details while ignoring the big picture.
the world ain't black and white, but is made much the simpler by supposing it so.
otoh, it. stick to simple cliches. it suits you.
http://www.reuters.com/article/2012/...8BC0Z820121213Swiss bank UBS (UBSN.VX) faces a fine of about $1 billion next week to settle charges of rigging the Libor interest rate benchmark, a person familiar with the situation said on Thursday.
Such a penalty would be more than double the $450 million fine levied on British bank Barclays (BARC.L) in June by U.S. and British regulators and would be the third massive U.S. fine to hit big European banks this week.
"The global settlement is about $1 billion," the source said. "It's expected early next week - on Monday or Tuesday."
Libor Manipulation Cost Fannie Mae, Freddie Mac $3 Billion
Libor manipulation cost Fannie Mae and Freddie Mac more than $3 billion, according to an estimate by a government watchdog, who recommends the government-owned mortgage giants sue the big banks.
That estimate and legal advice were made in a private report by Steve Linick, the inspector general for the Federal Housing Finance Agency, the regulator for Fannie and Freddie, which were taken over by the U.S. government during the financial crisis. The Wall Street Journal first reported the watchdog's analysis on Wednesday.
The report, a copy of which was obtained by the Huffington Post, was in a memorandum prepared by the FHFA watchdog's staff and delivered to FHFA Acting Director Edward DeMarco on Nov. 2. The FHFA did not immediately respond to a request for comment. According to the WSJ, the FHFA has told Linick in a recent letter that it was "exploring potential legal options."
“We conducted a preliminary analysis of potential Libor-related losses at Fannie and Freddie and shared that with FHFA, recommending that they conduct a thorough review of the issue," Kristine Belisle, a spokeswoman for the FHFA inspector general, said in an email. "FHFA agreed to study the matter further.”
More than a dozen banks in the U.S. and Europe are under investigation for allegedly manipulating a key short-term interest rate known as Libor, which influences borrowing costs throughout the global economy. Swiss bank UBS on Wednesday agreed to pay $1.5 billion to settle charges that its traders manipulated Libor over several years. The bank's Japanese unit pleaded guilty to a crime -- a rarity for a bank -- and two of its former traders have also been hit with federal criminal charges. Earlier this year U.K. bank Barclays Capital agreed to pay about $450 million to settle Libor charges.
One of the early defenses raised in the Libor scandal was that interest rates were often manipulated lower during the crisis, a boon to borrowers. What was the harm in that, the defenders asked? But Barclays and UBS traders -- and likely traders at many other banks -- also manipulated interest rates higher, to help bolster profits in derivatives trades.
http://www.huffingtonpost.com/2012/1...comm_ref=false
And what about the muni bond sales that were set against LIBOR?
GFY more than you are already ed
Quelle Surprise! UBS Gets a Cost-of-Doing-Business Fine for “Epic” Libor Fraud (Updated)
The gaming was so extensive that the FSA noted that “every Libor and Euribor submission in currencies and tenors in which UBS traded is at risk of having been improperly influenced”. “Trader A” would often put in internal orders to manipulate prices for months at a time. The perps also bought the support of players at other firms, via offering profit sharing or other bribes,
The reason US authorities are so leery of even indicting a major financial firm is that Federal government bodies as well as many private parties must cease doing business. The loss of many counterparties and the sudden unwinding of trades is correctly seen as hugely damaging to the firm in question, a probably death knell. Even AIG, which is not a major trading firm and is more foreign than American in terms of the mix of its business, felt it could not withstand an indictment; that’s the only way the wily and ruthless Hank Greenberg could be forced to give up the helm.
http://www.nakedcapitalism.com/2012/...z0bSQyZUlTR.99
http://www.bloomberg.com/news/2013-0...ipulation.htmlFreddie Mac (FMCC) sued Bank of America Corp., UBS AG (UBSN), JPMorgan Chase & Co. (JPM) and a dozen other banks over alleged manipulation of the London interbank offered rate, saying the mortgage financier suffered substantial losses as a result of the companies’ conduct.
Government-owned Freddie Mac accuses the banks of acting collectively to hold down the U.S. dollar Libor to “hide their ins utions’ financial problems and boost their profits,” according to a complaint filed in federal court in Alexandria, Virginia.
A Freddie Mac sign stands outside the headquarters in McLean, Virginia. Freddie Mac accuses the banks of fraud, violations of an rust law and breach of contract. Photographer: Andrew Harrer/Bloomberg
“Defendants’ fraudulent and collusive conduct caused USD LIBOR to be published at rates that were false, dishonest, and artificially low,” Richard Leveridge, a lawyer for Freddie Mac, said in the complaint, which was made public yesterday.
Manipulation of interest rates by some of the world’s biggest banks has spawned probes by half a dozen agencies on three continents in what has become the industry’s largest and longest-running scandal. More than $300 trillion of loans, mortgages, financial products and contracts are linked to Libor.
Libor is calculated by a poll carried out daily by Thomson Reuters Corp. on behalf of the British Bankers’ Association, an industry lobby group that asks firms to estimate how much it would cost to borrow from each other for different periods and in different currencies.
The complaint lists 15 banks as defendants as well as the British Bankers’ Association. They include Citigroup Inc. (C), Barclays Plc, Royal Bank of Scotland Group Plc (RBS), the Royal Bank of Canada, Deutsche Bank AG and Credit Suisse Group AG. (CSGN)
Freddie Mac accuses the banks of fraud, violations of an rust law and breach of contract. The housing financier is seeking unspecified damages for financial harm, as well as punitive damages and treble damages for violations of the Sherman Act.
Some of the world's largest banks including Barclays Plc, UBS AG and Royal Bank of Scotland Group Plc have been fined billions after admitting manipulating Libor--which forms the basis of trillions of dollars of transactions. Litigation could take the cost of Libor manipulation to $176 billion, Macquarie estimates.
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
