Update: August 6, 2012: “New York State’s banking regulator on Monday accused the Standard Chartered Bank of hiding about 60,000 transactions. British Bank Said to Hide $250 Billion in Iranian Transactions, New York Times, August, 6, 2012
Update:August 6, 2012: “The investigation into manipulation of the Libor interest rate has led banks to seek to implicate their rivals.” Every Bank For Itself as Fault-Finding Grows, New York Times, August 6,2012
Update: July 28, 2012: “The case could open the floodgates to hundreds of millions and even billions of pounds in claims against the taxpayer-backed lender and other banks. RBS pays more than £25m to businessman David Agar over interest rate swaps.
RBS’s Irish subsidiary last week agreed a settlement with Dublin-based businessman David Agar that will see it write-off swaps and loans worth €30m as well as covering Mr Agar’s legal costs, which are believed to total about €1m.” RBS pays more than £25m to businessman David Agar over interest rate swaps, The Daily Telegraph, July 28, 2012
Update: July 27,2012: “The bank said on Friday that Britain’s financial regulator has started an investigation involving the bank and four current and former senior employees, including finance director Chris Lucas.
The Financial Services Authority is investigating whether the bank made sufficient disclosures about the fees it paid under commercial agreements related to its capital raisings in June and November 2008. The bank said it is satisfied with its disclosures, but refused further comment.” Barclays Reveals New Probe And More I.S. Libor Law Suits, Reuters, July 27,2012
Update: July 26, 2012: “After an internal investigation, Nomura acknowledged that employees leaked information on at least three public offerings in 2010 to favored fund managers, who were then thought to have used stock short-selling to make money on the drop in the share prices of the three companies.” Nomura Chief Resigns After Insider Trading Scandal” New York Times, July 26, 2012
Update: July 13, 2012: “”In accordance with standard practice for briefing notes produced by the Markets Group, this report was circulated to senior officials at the New York Fed, the Federal Reserve Board of Governors, other Federal Reserve Banks, and U.S. Department of Treasury,” the New York Fed said.” Top U.S. Officals Briefed on Libor in April 2008, New York Times, July 13, 2012
Update: July 11, 2012: “British bank HSBC is to apologize to politicians in the Unitede States for its failure to properly implement money laundering controls meant to prevent terrorists and other criminals using its services.” HSBC chief admits bank failed to control money laundering, The Guardian, July 11, 2011
Update: July 11,2012: “Dozens of lawsuits filed by municipalities, pension funds and hedge funds have been consolidated into a few related cases against more than a dozen banks that are involved in setting Libor each day, including Bank of America, JPMorgan Chase, Deutsche Bank and Barclays.” Rate Scandal Stirs Scramble for Damages, New York Times, July 11, 2012
Update: July 11, 2012: ” German prosecutors say they’ve opened an investigation of the head of U.S. investment bank Morgan Stanley’s German branch and a former German state governor in connection with the sale of shares in a local power company. Morgan Stanley executive investigated in Germany, The Guardian, July 11, 2012
Update: July 9, 2012: “…It’s becoming apparent that Barclays’ reach extends far into the US financial sector, as evidenced by its $453m settlement with American as well as British bank regulators, and the US justice department’s active engagement in the case. Even by American standards, the Barclays traders’ emails are eyepopping, offering a particularly a chilling picture of how easily they got their colleagues to rig interest rates in order to make big bucks. (Bob Diamond, the former Barclays CEO, says the emails made him “physically ill” – perhaps because they so patently reveal the corruption.)” Wall Street’s Link to Libor, The Guardian, July 9, 2012
Update: July 8, 2012: “…Later, in a speech to Parliament, Mr. Osborne voiced the question that so many have asked recently in the United States. “Fraud is a crime in ordinary business — why shouldn’t it be so in banking?” he asked….”, The British At Least Are Getting Tough, New York Times, July 8, 2012
Update: July 6, 2012: “…British officials confirmed on Friday that they would pursue a fraud investigation into the manipulation of benchmark interest rates, a process that could result in criminal charges…. Investigations across multiple jurisdictions are focusing on more than 10 large financial institutions, including JPMorgan Chase, UBS and Citigroup…”, British Officials Announce Fraud Investigation Into Rate Manipulation, New York Times, July 6, 2012
Update: July 4, 2012: “Former Barclays CEO Bob Diamond is testifying before parliament in London today, and that’s sure to bring some shocking moments. But there’s already been one huge stunner. In advance of that testimony, Barclays released an email from October 29, 2008, written by Diamond to then-Chairman John Varley and COO Jerry del Messier (who also stepped down yesterday). The email from the CEO to the other two senior Barclays execs purports to detail the content of the conversation Diamond had with Bank of England deputy governor Paul Tucker that same day.” Banking Scandal Deepens, Rolling Stone, July 4, 2012
Update: July 4, 2012: “Another one bites the dust. The Royal Bank of Scotland is about to be fined $233 million (£150 million pounds) for its role in the Libor-rigging scandal. It joins Barclays as the first banks to walk the plank in what should be, but so far is not, the most sensational financial corruption story since the crash of 2008.”, Another Domino Falls in the LIBOR Banking Scam: Royal Bank of Scotland. Another Domino Falls in the LIBOR Banking Scam: Royal Bank of Scotland, Rolling Stone July 4, 2012
Update: July 3,2012: “…The investigation into illegal conduct at Barclays points to similar acts, including price-fixing, by other big banks….” Rigged Rates, Rigged Markets, New York Times, July 3, 2012
Update: July 2,2012: “…The integrity of Libor and other key rates have come into question as a result of the multiyear investigation by regulators. A number of banks are under scrutiny, including HSBC, JPMorgan Chase and Citigroup….” Chairman of Barclays Resigns, New York Times, July 1, 2012
“…The Financial Services Authority (FSA) says in its 40-page document on the affair that Barclays was involved in manipulating the rate from 2005 and stopped only in 2009. Managers in the division where they worked knew about the practice and compliance officers were informed. The FSA says its own staff were misled by Barclays during the four years of price-fixing….
…The BBA publishes individual bank interest rates alongside the industry average, enabling the media and City traders to see if Barclays was suffering more than other banks. After Northern Rock went bust and there was a suspicion that Barclays was in trouble, a group of traders deliberately drove down the Libor rate. The lower the rate, the more it appeared that Barclays was healthy and able to survive the credit crunch. At other times, traders colluded with rival bank staff to make profits by driving up the interest rate….
…Several banks are under investigation, including Citibank, Deutsche Bank and Royal Bank of Scotland. It is understood that many are facing questions about their conduct because Barclays informed on rivals as part of a settlement with regulators….”, Bank rate-fixing: the crucial questions: How did the Libor swindle work? Why didn’t managers act? And was Barclays the only bank involved, The Guardian, June 29, 2012
If you had an outstanding loan from 2005 through 2009 you may have been overcharged because of banks manipulating the LIBOR. You may have also been overcharged in the form of a prepayment penalty. I am not suggesting that you were; however, it may be worthwhile to follow this story closely. Charter Bank is owned by the Royal Bank of Scotland. More