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Tags: Deutsche | Bank | HSBC | Libor

Deutsche Bank, HSBC Probed for Libor Collusion

Thursday, 19 July 2012 07:21 AM

Traders at Deutsche Bank AG, HSBC Holdings Plc, Societe Generale SA and Credit Agricole SA are under investigation for interest-rate manipulation in a global probe that led to more than $450 million in fines for Barclays Plc last month, a person with knowledge of the matter said.

Regulators are investigating the possible roles of Michael Zrihen at Credit Agricole, Didier Sander at HSBC and Christian Bittar at Deutsche Bank, the person said on condition of anonymity because the investigation is continuing. The Financial Times reported names of the banks and traders earlier.

Philippe Moryoussef, who last month left his job as a Singapore-based derivatives trader at Nomura Holdings Inc., is also under investigation for his role in the conduct at Barclays, where he worked from 2005 to 2007, according to two people with knowledge of the matter.

Barclays, the U.K.’s second-largest bank by assets, was fined a record $451 million by U.K. and U.S. regulators in June for rigging the London and euro interbank offered rates. Traders tried to manipulate the benchmark to boost profit, while managers instructed rate-setters to make artificially low submissions to avoid the perception the lender was under stress amid turmoil in credit markets in 2007 and 2008.

The probe has engulfed officials from the Bank of England, who have been accused of encouraging banks to communicate about their rates. Three top Barclays executives — Chairman Marcus Agius, Chief Executive Officer Robert Diamond and Chief Operating Officer Jerry Del Missier — have resigned under pressure from regulators and Parliament.

Trading Aligned

The U.S. Commodity Futures Trading Commission, in its settlement with Barclays, said one of the bank’s traders tried to align strategies with at least four other banks’ traders in order to profit from positions in certain futures contracts.

Federal Reserve Chairman Ben S. Bernanke said regulators, including the CFTC and U.S. Securities and Exchange Commission, are investigating.

“There’s any number of enforcement agencies, including the Department of Justice, CFTC, SEC and foreign and state regulators, looking at this,” Bernanke told a House panel yesterday as part of his semi-annual testimony to Congress. “I’m sure that they will apply the law appropriately.”

Traders involved in the alleged manipulation may be charged by U.S. prosecutors before the Labor Day holiday on Sept. 3, said a person familiar with the Justice Department investigation in Washington.

Libor is determined by a daily survey that asks banks to estimate how much it would cost them to borrow from one another for different timeframes and in different currencies.

Bittar and Zrihen didn’t reply to e-mails seeking comment, and Sander didn’t answer a message sent to a Facebook account under that name.

Bittar Departure

Michael Golden, a spokesman for Deutsche Bank, confirmed that Bittar left the bank last year and declined to comment on the investigation. Deutsche Bank has disclosed that it is cooperating with regulators in the U.S. and Europe in the probe.

Mary Guzman, a New York-based spokeswoman for Credit Agricole, did not respond to a request for comment. Barclays spokesman Giles Croot, James Galvin, a spokesman for Societe Generale in New York and Juanita Gutierrez, a spokeswoman for HSBC declined to comment.

HSBC shares rose 0.7 percent to HK$67 as of 1:28 p.m. in Hong Kong, compared with the Hang Seng Index’s 1.5 percent gain. Credit-default swaps insuring HSBC Bank Plc’s five-year bonds have fallen about 11 basis points to 131.065 from the beginning of the year in New York, according to prices compiled by data provider CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.

© Copyright 2022 Bloomberg News. All rights reserved.

Thursday, 19 July 2012 07:21 AM
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