The U.K. Financial Conduct Authority published penalty notices against two traders for misconduct in relation to interest rate benchmarks Libor and Euribor.
The regulator issued the two warning notices, outlining regulatory breaches that may lead to fines or bans against working in the finance industry for the people. The individuals, who weren’t identified, breached regulations that led to “significant failings in relation to an interbank interest rate benchmark,” the FCA said on its website today.
Firms including Barclays Plc and UBS AG have been collectively fined about $6 billion for manipulating the London interbank offered rate, or Libor, and related benchmarks. Prosecutors and regulators around the world are investigating whether firms colluded to rig rates to benefit their own derivatives trades.
One of the individuals, identified in the notice as a trader, “dishonestly attempted to interfere with the interbank interest rate benchmark submissions of the bank by making requests to the bank’s submitters.” The second person “condoned the actions of other employees in receiving requests made by traders to benefit their trading positions,” according to the FCA.
The regulator has issued five warning notices in the investigation. The other three are identified as a bank manager, a rate submitter, and a bank employee. If traders fight the notices, they’ll be heard by an internal FCA body called the Regulatory Decisions Committee, a panel made up of industry figures including lawyers and accountants. The RDC’s decision can be contested in court.
Traders face fines of as much as 2.5 million pounds ($4.2 million) by the U.K. markets watchdog, according to two people with knowledge of the situation, Bloomberg News reported last month. The FCA is talking with several individuals implicated in the benchmark manipulation scandal as it prepares to issue the first civil fines.
Thirteen people have been charged in parallel U.S. and U.K. criminal probes.