In the ongoing London Interbank Offered Rate (LIBOR) probe, the first arrests were made in the UK. All of them are British nationals aged 33, 41, and 47. They were taken to a London police station, after searches at a property in Surrey and two premises in Essex.
A statement from the Serious Fraud Office (SFO) read: “Today the Serious Fraud Office (SFO), with the assistance of the City of London Police, executed search warrants at three residential premises” – one in Surrey and two in Essex.
“Three men, aged 33, 41, and 47, have been arrested and taken to a London police station for interview in connection with the investigation into the manipulation of Libor”.
Philip Carret was an investor and founder of Pioneer Fund, one of the first mutual funds in the United States. Carret ran the mutual fund for 55 years, during which time an investment of $10,000 became $8 million. That suggests he achieved a compound annual return of nearly 13% for his investors. Q1 2021 hedge Read More
It concluded: “The men are all British nationals, currently living in the United Kingdom”.
Sources say that regulators and prosecutors in the U.S. and Europe were targeting the individual traders, suspected of involvement in the Libor rigging act.
The SFO initiated the probe after Barclays PLC (LON:BARC) (NYSE:BCS) admitted rigging the rate, which influences an estimated $300 trillion worth of derivative products around the world. The bank was also accused of lowering submissions in a bid to change the insight of the lender’s finances. Barclays PLC (LON:BARC) (NYSE:BCS)’s agreed for the settlement worth $453 million with the U.S. and U.K. authorities. The Chief Executive Officer of Barclays PLC (LON:BARC) (NYSE:BCS) was stripped of his job due to the scandal. The other major banks, which are suspected to be involved in the Libor scandal, are JPMorgan Chase & Co. (NYSE:JPM), UBS AG (NYSE:UBS), Citigroup (NYSE:C), and HSBC Holdings plc (LON:HSBA) (NYSE:HBC).
The arrest follows the speculations that Swiss banking giant, UBS, has also entered into talks with the regulators and is seeking a settlement over alleged Libor rigging. UBS AG (NYSE:UBS) shall have to pay fines of more than $280 million in the settlement, which is likely to close before Christmas.
Around 20 financial institutions have been investigated over the charges of LIBOR rigging, which govern $300 trillion worth of contracts. These include everything from household mortgages to complex derivative products.
The Royal Bank of Scotland Group plc (NYSE:RBS) (LON:RBS) also said that it expects to settle the charges by paying the fines, which could be huge. With HSBC Holdings plc (LON:HSBA) (NYSE:HBC) disclosing plans to pay euro 1.2 billion in settlements for failing to abide by the anti-money laundering rules, there is an intense focus on the banking sector now. Standard Chartered PLC (LON:STAN) (LON:STAC) also paid an additional euro 203 million over allegations that it breached sanctions with Iran.