Rabobank ex-traders charged by U.S. with plot on yen Libor

Probes of rate rigging escalate

U.S. Probe

The U.S. Libor probe has led to criminal charges against eight individuals and resulted in more than $3.7 billion in penalties paid to law enforcement and regulatory agencies.

In December 2012, Tom Hayes, a former UBS AG and Citigroup Inc. trader was charged with manipulation of benchmark interest rates by the U.S. He was accused of conspiring with employees of JPMorgan Chase & Co., RBS, HSBC Holdings Plc, Rabobank Groep and Deutsche Bank, as well as Tullett Prebon Plc, ICAP Plc and RP Martin Holdings Ltd., over a four-year period to manipulate yen Libor rates.

Robson coordinated his yen Libor submission with the trader responsible for making the Libor position at another bank on behalf of co-defendants, the U.S. alleged. The U.S. also said the unidentified trader who conspired with the three defendants was a “senior trader” for Rabobank’s money market unit in Tokyo.

Libor Manipulation

The U.S. said Robson made a higher or lower yen Libor submission “consistent with the direction requested by a defendant and consistent with the co-defendant’s trading position.” These manipulated Libor submissions were frequently to the detriment of Rabobank’s counterparties to derivative contracts, as alleged by the U.S.

The U.S. complaint includes excerpts of e-mails, instant messages and calls that were recorded by the bank which the three defendants exchanged.

In one May 10, 2006, exchange, Robson said in an e-mail “it must be pretty embarrassing to set such a low libor. I was very embarrassed to set my 6 mth--but wanted to help thomo” in what the U.S. says was a reference to Thompson.

In a May 19, 2006, e-mail, Thompson informed Robson that his net exposure for his three-month fixes was 125 billion yen and stated “sneak your 3 m libor down a cheeky 1 or 2 bp” because “it will make a bit of diff for me.” Robson responded that same day stating, “No prob mate I mark it low.”

‘Chunky Fixing’

In an Aug. 4, 2008, exchange, Motomura asked Robson, “Please set today’s 6mth LIBOR at 0.96 I have a chunky fixing.”

In an Oct. 30, 2007, telephone call that was recorded by the bank, Robson asked Motomura, “do you want me to set anything for you?” to which Motomura replied that same day, “if it is lower, it’s better for me” asking for a “low 6’s please.”

Robson then caused Rabobank to submit a 6-month yen Libor at 0.98 percent, three basis points lower than Rabobank’s submission the day before, moving it from the middle of the panel to the yen Libor panel’s second-lowest, the U.S. said.

The case is U.S. v. Robson, 14-MAG-00069, U.S. District Court, Southern District of New York (Manhattan).

www.bloomberg.com

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