A former Royal Bank of Scotland Group (RBS) trader was fined £250,000 (€281,780) and banned from working in the industry by the UK markets regulator for manipulating Libor, five years after the bank was penalised for its role in the scandal, writes Suzi Ring.
The Financial Conduct Authority issued the penalty against Neil Danziger, saying the ex-trader “routinely” made requests to RBS Libor submitters to alter the rate to suit his trading positions between 2007 and 2010. The regulator said Mr Danziger, 42, also took trading positions into account when he acted as a submitter during the period.
Mr Danziger is the latest in a string of traders who have been fined, banned or sent to prison over the manipulation of the London interbank offered rate, a key interest-rate benchmark used to value trillions of euro in securities. A dozen banks and brokerages have been fined about €7.5bn since global authorities started investigating the behaviour a decade ago. RBS was fined £87.5m (€99m) by the FCA for its role in the scandal in 2013.
“Danziger’s reckless disregard of these standards has no place in the financial services industry,” Mark Steward, FCA executive director of enforcement and market oversight, said. “Market participants cannot turn a blind eye to what the community, through its laws and regulations, expects nor apply their own, lower standards.”
Danziger, who worked at RBS from 2002 to 2011 as an interest-rate derivatives trader, mainly focused on the Japanese yen variant of Libor. As well as attempting to influence the bank’s own submissions with his trading positions, he used a broker to try to influence other lenders’ Libor submissions, according to the FCA.
He also placed so-called “wash trades” — trades with no legitimate purpose other than to pay commissions to brokers to thank them for favours. Danziger denied that was the reason for the transactions. In June 2009, a broker called Danziger’s colleague to ask if he was in the office and said Danziger owed him “a little switchy today”, the FCA said in its penalty notice. The broker had been out drinking with Danziger the night before and told another individual they’d run up a £2,000 (€2,263) bill.
The broker said he’d asked Danziger to help him out because of the bill and that Danziger had told him to “put a switch through”. Danziger executed a wash trade later that day, the FCA said.
Danziger’s lawyer said the former trader, who was first interviewed by regulators in 2012, is a scapegoat for the “systemic problems relating to Libor”.