Home Business Lloyds Bank Fires Eight After Rate Rigging Probe

Lloyds Bank Fires Eight After Rate Rigging Probe

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Lloyds Banking Group PLC (ADR) (NYSE:LYG) (LON:LLOY) said on Monday it had terminated eight individuals and clawed back about $4.9 million in unpaid bonuses after it was fined by regulators over manipulation of global benchmark interest rates.

However, the eight individuals still have the right to appeal the bank’s decision to dismiss them.

Lloyds fined $370 million

As reported earlier, Lloyds Banking Group PLC (ADR) (NYSE:LYG) (LON:LLOY) was handed a joint $370 million fine back in July by the UK Financial Conduct Authority and U.S. regulators for its part in a global interest rate rigging scandal. The bank became the first bank to face charges it attempted to manipulate the “repo” rate used to set fees Lloyds paid to access central bank liquidity. According to a report, four traders and two managers were involved in the potential fraud.

The UK FCA inquired into alleged manipulation of bench mark rates, including a scheme which was said to include a rigging method used to set the fees on a taxpayer-backed funding scheme for banks.

In an earlier civil case, the FCA also charged 19 staff at Lloyds Banking Group and its Bank of Scotland subsidiary were directly involved in or aware of the rate-rigging scheme.

In July, the U.S. Commodity Futures Trading Commission also issued an order against Lloyds Banking Group PLC and Lloyds Bank plc, both bringing and settling charges relating to false reporting and attempted manipulation of the LIBOR for Sterling, the U.S. Dollar and Japanese Yen committed by employees of the bank.

Dismissal following inquiry

Following an investigation after it was fined by  American and British regulators, the bank said Monday that it had dismissed eight staff and around 3 million pounds ($4.9 million) in unpaid bonuses had been forfeited as a result of the action. The bank said it had undertaken disciplinary action immediately after the settlements were announced. However, Lloyds Banking Group PLC (ADR) (NYSE:LYG) (LON:LLOY) clarified that it was unable to take disciplinary action against a number of individuals who had already left the group prior to the settlements, though it passed on its finding to the UK’s FCA and other regulators.

The bank’s chief executive Antonio Horta-Osorio said the board and the group’s management team are committed to preventing a recurrence of such unacceptable behavior by employees.

The bank’s announcement of dismissals come days after the U.K. Treasury launched a consultation into whether it should extend new laws that govern LIBOR to cover other benchmarks, including the WM/Reuters 4 p.m. London fix, the London gold and silver fixes.

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