HSBC said to reject EU settlement in Euribor-rigging probe

Trading Positions

Barclays Plc, UBS AG and RBS are among firms who have been fined about $3.7 billion for rigging the London interbank offered rate, or Libor, the benchmark for more than $300 trillion of securities worldwide.

Rabobank Groep, the co-operative formed in 1898 to lend to Dutch farmers, was last week fined 774 million euros for its involvement in rigging benchmark interest rates, the second- largest in the global investigation.

Almunia has said regulators are convinced that traders of interest-rate derivatives colluded to manipulate the Euribor and Libor rates of the banks to influence them and obtain a benefit in their own trading positions.

The EU’s antitrust chief has been vocal about his desire to settle both probes by the end of the year and he pointed out what would happen to entities not wishing to play ball.

That would mean facing a formal antitrust complaint, a so- called statement of objections, which would pave the way to a fully-fledged fine.

Reduced Penalty

Settling parties would also receive a short statement of objections, to which they would be invited to merely confirm the content, before the reduced fine would be issued.

The 10% reduction “isn’t necessarily considered as an incentive to enter into talks” to settle, Adrien Giraud, a lawyer at Willkie Farr & Gallagher LLP, said in a phone interview.

The “two main drivers” for entering into settlement talks with the commission are to shorten the duration of the infringement and lower the value of the sales -- or proxy of sales in this case -- taken into account to calculate the fine, Gerrits said.

These discussions “can lead the commission to adopt a decision with a fine that is probably lower than what it would have been in a contentious procedure” as there is more of a negotiation, Giraud said. During bilateral talks the parties “can try to soften the commission’s argumentation.”

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