Breaking the Rules? Don't E-Mail About It

E-mail leaves a trail. This is not new information. Yet somehow it clearly hasn’t sunk into the minds of some people who are doing things they don’t want other people to know about. The latest proof: the Libor scandal, that most unsexy investigation into whether banks manipulated a key benchmark used to set the interest rate on $350 trillion worth of car loans, mortgages, and other debt. (Need a refresher? Check out my colleague Brian Bremner’s primer from March.)

Yesterday, Barclays agreed to pay a record $451 million in fines to U.S. and British regulators and admitted it submitted false rates to the group that compiles Libor. Banks are supposed to submit rates that reflect their borrowing costs. By submitting a lower rate, a bank can make itself appear healthier. At times, a higher rate could boost the bank’s investments. To build their case against Barclays, the regulators quoted directly from e-mails and phone conversations among the bank’s loose-lipped traders and other bankers. Here are some choice exchanges in the settlement documents (PDF). Try not to wince.