Several former traders at UBS have been offered a deal by federal prosecutors in the unfolding Libor scandal, which if we had a criminal justice apparatus dedicated to accountability would be a moment of hope for the potential of going up the chain and indicting those who authorized the rate-rigging. Under the deal, the US would waive the traders from criminal charges in exchange for their cooperation in the investigation.
The leniency deal was offered to former traders and other employees who had relatively junior-level jobs at the Swiss bank, the person said.
No more than a few of the UBS employees under investigation for alleged interest-rate manipulation still work there, and the company has fired or suspended about 20 traders and managers as a result of the four-year inquiry, another person familiar with the investigation said. A Justice Department spokeswoman declined to comment.
The agreements with former UBS employees are a sign that the Justice Department is trying to persuade them to turn against the people suspected of leading the alleged interest-rate rigging at the bank, legal experts said. It isn’t clear who the biggest targets of the continuing probe are.
UBS already has a leniency deal in place for the company with respect to the antitrust division of the Justice Department, which is tasked with investigating collusion on rate-rigging (which has been alleged by the Barclays employee, when he said his bank wasn’t submitting an honest Libor mainly to keep up with the Joneses). Barclays and Deutsche Bank made similar leniency deals. The fraud section is supposed to be investigating individual criminal activities inside the firms, and that’s where this leniency deal springs from.
I have simply lost hope that the normal practices of criminal investigations apply when it comes to the banks. This ought to be good news, that the prosecutors are flipping the people at the bottom in an attempt to get to the people at the top. But beyond a cash settlement that will include a discount for early cooperation, I don’t think you should expect anything other than traders somewhat more senior than these traders getting arrested. And just the idea that a trader would go to jail for fixing prices but the bank would be immune from the same charge should indicate the hollowness of this approach.
This is an amusing sidelight:
The ex-Barclays traders considered vulnerable to possible prosecution include one who was promised Bollinger champagne as a reward for rigging Libor. Regulators said in June that another trader at the U.K. bank set a daily electronic calendar reminder to “SET 3 MONTHS US$ LIBOR LOW!!!!!!”
But Barclays gave prosecutors that email, so you know, they’re off with a fine.
I understand how this is designed to work, but there’s no faith on my part that it will actually work in that intended manner. Small fish flipping on other small fish is not really accountability for such a major crime.




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the doj is great at getting tough with foreign banks, Indian hedge fund managers but not domestic firms. its not a flaw its a feature( future trademark of the democratic party)
The the giant banks spend a great deal of time conspiring to steal from the marketplace. It seems they spend at least equal time building layers of obfuscation and deniability to shield them from the consequences of their theft.
It’s not like anybody died. /s
Well, see, it wasn’t an institutional failure: the proof of that is the electronic calendar reminder. If it was company policy or something, the trader wouldn’t have needed that, the culture would have steeped him in it. Obviously, he was a rogue.
Gotta admire their ingenuity and creativity.
Whatever happened to our attorney general, what’s his name?????
Isn’t he in some way connected with the DoJ?????
Thank heavens!
I feel much better. I though this whole thing was systemic.
(P.s. Systemic is my “word of the day”.)
None of this money is real anyway. It’s all paper, notional stuff.
We have a way to go yet, before it’s really obvious, when food is traded for heat or clothing.
Get out that World’s Smallest Violin:
http://www.huffingtonpost.com/2012/08/09/jpmorgan-chase-libor-subpoenas_n_1760015.html
>>
seems that those lap-dog regulators are nice and captured and can be made to cast these types of ’2 sets of laws & 2 sets of punishment’ framings for their masters …
“on the issue of prosecutions on Wall Street, one of the biggest problems about the collapse of Lehman’s and the subsequent financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn’t necessarily illegal, it was just immoral or inappropriate or reckless… You know, the financial sector is very creative, and they are always looking for ways to make money. That’s their job. And if there are loopholes and rules that can be bent and arbitrage to be had, they will take advantage of it.”
President Barack Obama
October 2011
thank god no one is above the law the these ‘exceptional’ United States
PS. hey barack, so yer saying it was all of those poor folks seeking all of that ‘sub-prime lending’ that created all of the securitized debt instruments and other collateralized debt bombs, rather than the banking criminals? – I see…you classist liar
who got convicted and jailed, for torturing in the military prison in Iraq?
Did any of the high level people that planned that conduct get convicted or jailed?
11 dead workers on an oil platform in the Gulf of Mexico. any charges for manslaughter or anything like it?
How many killed in the preventable Massey mine disaster a few years ago? any charges coming out of that?
allan, the only one that would concern me, were I JPMC, is Canadian Competition Bureau. You piss off the Canadiens, those guys carry hockey sticks in their cars. Everybody else is under the thumb of the 1%. DoJ, CFTC, and SEC – toothless and worhtless.
Excellent points.
But we got thousands of people in prison for minor marijuana possession.
Not that anyone cares, but, that speech cost him MY vote and about 7 more I can name.
Me too. I think that was the moment. It’s hard to remember precisely now.
Grossly classist, and corporatist. Don’t hold your breath waiting for enforcement officials to say: “well, see, it’s hard to prosecute drug dealers-they know our game and they don’t spoon feed us cases against themselves. So we’re not going to prosecute them, rather we’ll work a “deal” with them where they pay a fine equivalent to about 1% of their profits over the last year.”
Because this seems to be the case made for soft-pedaling of criminal prosecution of the financial sector: “it would be hard to prosecute them, they won’t help us with it so we’re not going to do it.”
NO DEALS.