RBS instant messages show Libor rates skewed

More E-mails

Managers including Nygaard, Todd Morakis, the Singapore-based head of trading for emerging markets, who joined in June 2010, and Lee Knight, the Tokyo-based chief operating officer of global trading, knew derivatives traders were making regular requests to change rates, Tan said in his lawsuit. He’s seeking to force RBS to release more e-mails that he says show the bank condoned the activity.

Nygaard and Morakis declined to comment.

Knight said he didn’t believe that managers including Mohideen, Nygaard or Morakis would have turned a blind eye if they knew traders tried to influence the bank’s rate-setters, according to minutes of an Oct. 17, 2011, meeting he had with an RBS disciplinary manager cited in Tan’s filing. Knight didn’t respond to phone and e-mail messages.

RBS traders also spoke about Libor with counterparts at other firms, Tan’s filing shows.

‘Cartel Now’

“It’s just amazing how Libor fixing can make you that much money or lose if opposite,” Tan said on an Aug. 19, 2007, conversation with traders at other banks, including Deutsche Bank’s Mark Wong. “It’s a cartel now in London.”

“Must be damn difficult to trade man,” Wong replied. “Especially you not in the loop.”

Michael Golden, a spokesman for Frankfurt-based Deutsche Bank, cited previous statements made by the company that it is continuing its investigation into the matter and cooperating with authorities. Golden said Wong declined to comment.

Tan started expressing misgivings about the Libor-setting process in May 2011 as regulators began investigating potential rate-rigging across the industry and RBS started its own internal probe, the transcripts show.

“This whole process would make banks pull out of Libor fixing,” Tan said in a May 16, 2011, chat with money markets trader Andrew Smoler. “Question is what is illegal? If making money if bank fix it to suits its own books are illegal... then no point fixing it right? Cuz there will be days when we will def make money fixing it.”

“Regulators need to be seen to be doing something but what negative thing can come to this?” Smoler, who declined to comment for this story, said according to the transcript.

The case is Tan Chi Min v The Royal Bank of Scotland. S939/2011. Singapore High Court.

Bloomberg News

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