The Financial Conduct Authority has banned Paul Robson, an ex-Rabobank Groep (RABO) trader, from the financial services industry in the United Kingdom. Robson pleaded guilty to U.S. fraud charges and was convicted for his involvement in a conspiracy to rig the London interbank offered rate (Libor). This is the FCA’s first public action against an individual for Libor manipulation.
Robson was the main submitter of yen Libor at the bank. FCA’s acting enforcement and market oversight director Georgina Philippou said that there was no way Robson could argue that he didn’t know what he was doing. The criminal charges submitted by the Southern District of New York last year said that while at Rabobank Robson was responsible for its yen Libor submission from January 2006 through at least November 2008. He then went to another brokerage firm before going to work at Bank of Tokyo-Mitsubishi UFJ, also in the U.K. The FCA said that Robson kept manipulating Libor through at least the beginning of 2011.
He is accused of colluding with co-workers and employees of other firms of manipulating the rate to their benefit. In May, trials are set to start for individuals charged with Libor rigging.
Two years ago, Rabobank consented to pay $1.1 billion to resolve probes in the U.K., the U.S. and the Netherlands over its involvement in Libor rigging as well as the manipulation of related benchmark interest rates. So far, regulators globally have imposed some $6.5 billion in fines against firms for their involvement in manipulating Libor.
In other related, Anthony Allen, another ex-Rabobank trader, has pleaded not guilty to charges related to his alleged involvement in manipulating Libor. The banks’ former liquidity and finance global head waived extradition and made his plea in U.S. federal court.
Allen was indicted last year. He is one of several Rabobank traders charged by the U.S. Justice Department for their alleged involvement in the rigging scandal. The DOJ is accusing Allen of setting up a system that allowed fellow bank employees to trade in derivative products tied to US dollar and Japanese yen Libor rates. These employees were able to convey their trading positions to Libor submitters. Others at the bank were then asked to turn in Libor contributions that were in line with the financial interests of the bank or traders to benefit their trading positions.
Some 18 financial institutions in 11 countries have been tied to the Libor rigging scandal. According to media reports, Deutsche Bank (DB) is under investigation by the state of New York as well as by the DOJ. Already the bank has consented to pay the European Union $351 million for its purported involvement. In 2007, Mark Wong, a Deutsche Bank trader was caught trying to manipulate the rate to his advantage. Last month, Deutsche Bank was one of the two banks that failed the US Federal Reserve’s ‘stress test,’ which is designed to see whether the institutions could handle a financial crisis like the one of 2008. The bank will not be allowed to buy back stock or raise dividends until it passes the test.
Contact our securities law firm if you suspect you were the victim of financial fraud.
Rabobank Trader Pleads Not Guilty to Libor-Fixing Charges, The Wall Street Journal, March 20, 2015
Ex-Rabobank Trader Banned From U.K. Finance for Rigging Libor, Bloomberg, March 17, 2015
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