UK’s SFO to target Euribor traders

Fresh charges in the UK Libor rigging probe may target traders linked to the benchmark’s euro counterpart, with prosecutors focusing efforts on that strand of the probe in recent weeks.

The UK Serious Fraud Office (SFO) has interviewed a number of former bankers in connection with manipulating the euro interbank offered rate, or Euribor, including a group of ex-Deutsche Bank traders, according to sources, who did not want to be identified because the interviews are private.

The SFO was planning to make charging decisions quickly after the interviews, said one of the people.

The agency is looking to send out a wave of requisitions — orders for a person to attend court to face charges — to individuals related to the interest-rate scandal by the end of September, said another person with knowledge of the probe.

In a speech this month, SFO director David Green said more charges in the investigation “are likely this autumn”.

The SFO hasn’t prosecuted anyone so far in relation to Euribor, instead focusing on the yen and dollar versions of the London interbank offered rate.

The agency has charged 13 people in those strands of its investigation.

Tom Hayes, a former trader at UBS Group and Citigroup, was jailed for 14 years following a trial over the summer.

One other banker has pleaded guilty and 11 former traders and brokers are scheduled to stand trial in October and January.

Authorities around the globe have been investigating how banks manipulated the interest-rate benchmarks for the last seven years with fines of about €7.95bn levied against a dozen institutions.

The benchmarks are used to value trillions of dollars of securities from student loans to mortgages.

A spokesman for the SFO declined to comment on the possible charges as did a spokesman for Deutsche Bank in London.

Others that may still face the wrath of the SFO include about 20 individuals linked to yen Libor rigging described as co-conspirators of Hayes at his trial.

The list of traders and brokers previously worked at institutions including Royal Bank of Scotland, JP Morgan Chase and ICAP.

Euribor is calculated using contributions from a panel of 24 banks including Barclays, Deutsche Bank, and JP Morgan.

The panel dramatically shrunk from a peak of 44 in 2012, after banks started abandoning their posts in the wake of the Libor scandal.

The rate is calculated by removing the highest and lowest 15% of submissions, with the remaining figures then averaged to reach the final rates each day.

Bloomberg


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