Deutsche Bank trader fired over rate-rigging loses $53 million

Bank said Bittar colluded with Barclays Plc

Setting Rates

Bittar was also alleged to have had inappropriate communications with colleagues responsible for making the bank’s Euribor submissions, the people with knowledge of the firm’s internal processes said.

Bittar and Adolph, a yen derivatives trader who joined Deutsche Bank from Merrill Lynch & Co. in 2008, are the only two employees to be fired by the German lender over rate-rigging to date, the people said.

Adolph was dismissed in December 2011 for inappropriate communications with UBS AG’s Thomas Hayes, the people said. Adolph settled out of court with Deutsche Bank after the firm tried to withhold some of his stock awards that had already vested, according to two people with knowledge of the case.

Adolph was responsible for inputting the firm’s submissions to the yen benchmark and trading derivatives whose values depended on it, the people said. U.S. prosecutors charged Hayes with wire fraud and price-fixing in December. His lawyers at Fulcrum Chambers declined to comment.

‘Gigantic Fix’

The Justice Department, in its December settlement with Zurich-based UBS, cited a conversation on or about May 21, 2009, between Hayes and an individual only identified as ‘Trader B.’ That trader is Adolph, two people with knowledge of the exchange said.

“cld you do me a favour would you mind moving you 6m libor up a bit today, i have a gigantic fix,” Hayes said, according to the filing.

“I can do taht,” Adolph replied. He later increased Deutsche Bank’s six-month yen Libor submission 6 basis points that day, the transcript shows. That was the first increase in the firm’s submission since March 3. It had remained unchanged since April 15.

“u happy with me,” Adolph asked Hayes the following day.

“thx,” Hayes replied.

Deutsche Bank is among lenders that have yet to reach settlements with regulators probing the Libor-rigging scandal. Barclays, Britain’s second-biggest bank, was the first to settle, paying a 290 million-pound ($458 million) penalty in June for manipulating borrowing costs. UBS, Switzerland’s biggest bank, was fined $1.5 billion in December. Royal Bank of Scotland Group Plc, the biggest government-owned lender in the U.K., may pay as much as 500 million pounds in penalties in coming weeks, according to two people with knowledge of the talks.

Bloomberg News

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