With the Justice Department under pressure to show progress against Wall Street crime, Attorney General Eric Holder joined a multi-agency briefing for reporters yesterday to announce criminal charges in the Libor rate manipulation case.
Facing intense criticism for the DOJ’s failure to bring criminal charges against figures central to the 2008 Wall Street collapse, Holder in August signaled a renewed push to tackle financial crime cases.
The charges announced yesterday were against three former brokers in a scheme to manipulate the London Interbank Offered Rate, a key global benchmark,
Emphasizing the importance of the investigation, Holder called the Libor investigation a “major priority” for the department.
“This is the kind of activity that we are focusing on in ongoing investigations and the kind of conduct that we are bound and determined to hold people accountable for,” Holder said.
(And today, Holder met for two hours with J.P. Morgan Chase & Co. CEO Jamie Dimon about resolving a variety of civil and criminal allegations against the investment firm, with a fine as high as $11 billion floated).
The Libor complaint, filed Sept. 13 in Manhattan federal court and unsealed on Wednesday, charges three former brokers for the London-based financial firm ICAP with two counts of wire fraud and conspiracy to commit wire fraud.
ICAP, the world’s largest interdealer broker, has also agreed to pay U.S. and British authorities a total of $87 million, according to David Meister, the director of enforcement for the Commodity Futures Trading Commission and a former Assistant U.S. Attorney for the Southern District of New York, where he was a member of that office’s Securities and Commodities Fraud Task Force.
The charges are just the latest in the global investigation that has ensnared several high-profile banks, including UBS AG, Barclays plc and Royal Bank of Scotland Group plc.
“We’re not done,” Mythili Raman, the acting Assistant Attorney General for the Criminal Division, said told reporters on Wednesday.
In London, the Serious Fraud Office is also pursuing Libor-related cases, with prosecutors on both sides of the Atlantic appearing to have worked out early differences over which jurisdiction should prosecute whom.
Other Libor coverage
Bloomberg has the response from ICAP CEO Michael Spencer who said he regrets “this whole episode very deeply and very profoundly. A small number of people have let us down very, very badly.”
The Telegraph has the rundown on “wow ICAP’s ‘libor service’ worked,” noting that “for an alleged conspiracy to manipulate global borrowing rates that made millions of pounds for the traders involved, it seems the brokers that made the scheme possible were prepared at times to do the work for surprisingly small bribes.”
The New York Times has a roundup of some of the more extravagant requests made by the ICAP traders, including “curry meals, steaks, Champagne and a Ferrari.”
Meanwhile, The Wall Street Journal breaks down the fine “relative to the broker’s market capitalization.”
And Reuters looks at the how the Libor scandal reveals pressures on “honest brokers.”