Several former Barclays Plc (BARC) traders suspected of involvement in Libor manipulation were ordered to report to U.K. fraud prosecutors for interviews, according to a person with knowledge of the case.
The Serious Fraud Office sent notices to the people in the U.S. and U.K. over the last six weeks, telling them to come in to be questioned under caution as part of a global investigation into rate-rigging, said the person, who asked not to be named because the requests are private. An interview under caution means anything a suspect says can be used as evidence in a criminal trial.
The agency is preparing to prosecute more people in the case after U.S. authorities charged three former Rabobank traders this week with engaging in a five-year scheme to manipulate the London interbank offered rate, or Libor.
Prosecutors and regulators around the world are investigating whether more than a dozen firms colluded to rig Libor in a number of currencies to benefit their own derivatives trades. The recent interview requests relate to possible manipulation of dollar Libor, the person said.
The SFO conducts three types of interviews -- compulsory, under-caution and voluntary. A suspect has to attend an interview under caution, but isn’t compelled to answer questions. Suspects are allowed to have their lawyer present. If they don’t show up, the SFO can seek an arrest warrant.
Nilima Fox, a spokeswoman for the SFO, declined to comment. Giles Croot, a spokesman for Barclays, also declined to comment.
Barclays was the first firm to be fined over Libor rigging in June 2012 by U.S. and U.K. authorities. The London-based lender’s then-Chief Executive Officer Robert Diamond resigned over the scandal. No former or current Barclays employees have been arrested or charged in the investigation.
Firms including Barclays and UBS have been fined a total of about $6 billion for manipulating benchmark interest rates. The European Union fined six firms, including Deutsche Bank AG and Societe Generale SA (GLE), a record 1.7 billion euros ($2.3 billion) in December for rigging interest rates linked to Libor.
Ten people have been charged in the parallel U.S. and U.K. probes, including Tom Hayes, a former trader at UBS AG (UBSN) and Citigroup Inc., who has been at the center of the criminal investigation. He pleaded not guilty at a London court last month. Two former RP Martin Holdings Ltd. brokers, Terry Farr and James Gilmour, also pleaded not guilty at the hearing.
The U.S. has charged eight people, including Hayes. Former Rabobank traders Paul Robson, Paul Thompson and Tetsuya Motomura, former UBS trader Roger Darin, and three former ICAP Plc (IAP) brokers, Darrell Read, Daniel Wilkinson and Colin Goodman, have been charged by the Justice Department. None are in U.S. custody.
The charges against the Rabobank traders earlier this week “certainly underlines that the DOJ will step in when the SFO will not,” said Roger Burlingame, a former U.S. federal prosecutor now based in London at Kobre & Kim LLP.
Hayes is scheduled to stand trial in the U.K. in January 2015, with Farr and Gilmour’s case following in September. Judge Jeremy Cooke told Farr and Gilmour at the last hearing it was “with regret” that the issue would be “hanging over your head” for such a long time, but the case had to be delayed as more individuals may be charged.
The Financial Conduct Authority, the U.K.’s markets regulator, is preparing its first civil penalties against individuals over Libor misconduct. The FCA sent notices to traders before Christmas outlining its findings, with proposed fines of more than 100,000 pounds ($164,000) in some cases, a person with knowledge of the investigation said.
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