crime

U.S. regulator sues 13 banks in Libor rate-fixing case

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The U.S. credit union regulator has filed an anti-trust lawsuit against 13 major international banks as part of the global crackdown in the Libor rate-rigging scandal.

The National Credit Union Administration (NCUA) said it aims to recover some of the funds lost by five corporate credit unions it supervised and which have since failed, according to a statement posted on the NCUA website Monday.

"We have a responsibility to pursue recoveries through every available avenue against those who caused billions of dollars in losses to credit unions," NCUA Board Chairman Debbie Matz said.

"Some firms were manipulating international interest rates in a way that cost the five corporates to lose millions of dollars. Just as we are doing in our other suits, we are seeking to hold responsible parties accountable for their actions," she added.

The complaint -- that the banks violated both federal and regional anti-trust laws -- was filed in a Kansas court, the agency said.

The NCUA noted that around 40 lawsuits have been filed around the world in relation to rate manipulations at Libor, the London Interbank Offered Rate, a leading benchmark used in financial transactions.

So far, three banks -- UBS, Royal Bank of Scotland and Barclays -- have been fined a total of around $2.5 billion to offset the losses.

In addition to these three banks, the NCUA has now filed suit against Societe Generale, UBS and Crédit Suisse, as well as JPMorgan Chase, Lloyds Banking Group, WestLB, Raiffensen Bank, Norinchukin Bank, Bank of Tokyo Mitsubishi UFJ and Banque Royale du Canada.

In a separate statement, the regulatory agency announced another lawsuit against Morgan Stanley and eight other international banks for having sold nearly $2.4 billion in "faulty securities" to credit unions.

The NCUA said the lawsuit aimed to recover some of the losses, which caused five corporate credit unions to fail.

"We continue to pursue accountability and recovery in the wake of billions of dollars in sales of faulty securities that led to the collapse of several corporate credit unions and handed the industry the costly bill of paying for the losses," Matz said.

The lawsuit, filed in New York federal court, targets JPMorgan Chase, Credit Suisse, Royal Bank of Scotland, UBS, Goldman Sachs, Wachovia (now Wells Fargo) and Ally Bank.

Of the $2.4 billion worth of "toxic" securities, some $416 million were sold by Morgan Stanley, the regulatory agency said.

The NCUA noted it has settled similar claims with Citibroup, Deutsche Bank, HSBC and Bank of America, recovering more than $335 million in fines.

© (C) 2013 AFP

©2021 GPlusMedia Inc.

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$2.5 billion in fines now thats more like it, wonder if Japanese regulators have the kahonas to impose similar fines in Japan..... doubt it!

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Someone like Madoff receives strict punishment, though in his case, he committed a $50 billion dollar fraud that couldn't be overlooked (ie he went bust and notified the regulators). Until that point, warning signs were brushed under the carpet and people who raised the alarm to the SEC for years (nine, if you're interested) about the unfeasibility of his profits were ignored.

Others have not and will not go to prison, despite breaking the law on a massive scale. HSBC was involved for in money laundering for Mexican drug cartels - this is not a suspicion, it is an established certainty. No one has been imprisoned for this, despite it being completely illegal. You really should read what they were actually doing, it beggars belief.

The LIBOR affair has been described by some as the worst price-fixing scandal in financial history, and by Michael Greenberger as "the height of criminality".

http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425

If you believe that the fines imposed are to be considered a severe punishment, you're deluded. The message that the banks will have learned from the last few years is that they can repeatedly break the law in almost any way they choose and senior execs will not go to jail.

Jail is for schmucks.

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Scum these crimmanls in suits called bankers, I would like to see them all behind bars and stripped of everything they have plundered and stolen.

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Wipeout - the best part of that article is the quote "If cities and towns and other investors lost money because of Libor manipulation, that was their own fault for ever thinking the banks were competing in the first place." Everybody knew that these rates were self-reported. Should they have misreported, absolutely not. But to call this the "height of criminality" is a huge overstatement. That is like a teacher asking the students to grade their own tests and then acting shocked to learn that some students fudged their own grades.

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That is like a teacher asking the students to grade their own tests and then acting shocked to learn that some students fudged their own grades.

Yes, it's really a lot like a hypothetical scenario where students cheat on their tests.

Very useful analogy.

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