US and European prosecutors close to Libor arrests
US federal prosecutors have recently contacted lawyers representing some of the suspects, Reuters reports
By CFOWorld staff | CFO UK | Published 09:59, 23 July 12
Authorities in the UK and Europe are reportedly set to arrest traders involved in the key interest rate manipulation, Reuters reported on Monday.
According to people familiar with a sweeping investigation into the rigging scandal, US federal prosecutors have recently contacted lawyers representing some of the suspects to notify them that criminal charges and arrests could be imminent.
Defence lawyers, some of whom represent suspects, said prosecutors have indicated they plan to begin making arrests and filing criminal charges in the next few weeks. In long-running financial investigations it is not uncommon for prosecutors to contact defence lawyers before filing charges to offer suspects a chance to cooperate or take a plea, these lawyers said.
The prospect of charges and arrests means prosecutors are getting a fuller picture of how traders at major banks allegedly sought to influence the London Interbank Offered Rate, or Libor, and other global rates that underpin hundreds of trillions of dollars in assets. The criminal charges would come alongside efforts by regulators to fine major banks, and could show that the alleged activity was not rampant at the lenders.
"The individual criminal charges have no impact on the regulatory moves against the banks," Reuters reported a European source saying. "But banks are hoping that at least regulators will see that the scandal was mainly due to individual misbehaviour of a gang of traders."
In Europe, financial regulators are focusing on a ring of traders from several European banks who allegedly sought to rig benchmark interest rates such as Libor, said the European source familiar with the investigation in Europe.
There are also probes in Europe concerning Euribor, the Euro Interbank Offered Rate.
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