Among the Deutsche Bank AG traders whose e-mails were made public when the lender was fined a record $2.5 billion for rigging Libor, one stands out.
Identified only as Trader Three by the U.S. Department of Justice, he was Deutsche Bank’s most profitable derivatives trader, earning a bonus of almost 90 million pounds ($136 million) in 2008 alone. He was responsible for the majority of the requests for skewed Euribor submissions, the U.S. Commodity Futures Trading Commission said Thursday.
That trader is Christian Bittar, according to two people with knowledge of the situation, who asked not to be identified because they weren’t authorized to speak publicly. The proprietary trader, who specialized in short-term derivatives contracts, left Deutsche Bank in 2011. He was interviewed by the U.K.’s Serious Fraud Office in recent months, according to another person familiar with the matter. Bittar hasn’t been charged with any offense.
Bittar’s lawyer said by e-mail the settlements were “anonymized for good reason” and wouldn’t comment on his identification in them. Peter Carr, a Justice Department spokesman, declined to comment.
Trader Three worked in concert with colleagues in Frankfurt and as many as six counterparts at other firms, seeking to manipulate the rate to boost the profitability of his positions, according to the Justice Department. Sometimes he allegedly worked against the interests of others at his own firm if it benefited his trading book.
“My cash desk will be against us so we’ll have to do some lobbying,” he told a derivatives dealer at a rival bank in a Sept. 7, 2006, message released by the Justice Department. He noted Royal Bank of Scotland Group Plc and UBS Group AG also were likely to be “against” and promised to contact a trader at an additional firm.
“ok we have to fight hard,” the rival bank dealer replied.
Trader Three’s relationship with his counterpart at that bank didn’t stop him from on occasion submitting rates that would hurt it.
“LETS TAKE THEM ON !!” he said in a Sept. 21, 2005, message to a rate-submitter at Deutsche Bank, according to the bank’s settlement with the New York Department of Financial Services, which described Bittar by his title. The rival bank “IS DOIN IT ON PURPOSE BECAUSE THEY HAVE THE EXACT OPPOSITE POSITION.”
“Ok, let’s see if we can hurt them a little bit more then,” the submitter replied.
Bittar, who joined Deutsche Bank in 2001, took billion-euro positions on the direction of short-term interest rates with the firm’s own money and reaped hundreds of millions of euros in profit for the bank.
The lender started to scale back its proprietary-trading operations in 2008, and Bittar was named global head of money market derivatives trading, moving to Singapore, in the years that followed, according to the CFTC. The lender dismissed him in December 2011, people with knowledge of the situation said in 2013.
After leaving the bank, Bittar joined Bluecrest Capital Management, the hedge fund founded by Michael Platt. Bittar resigned from that firm last year, a person familiar with the matter said at the time.
Britain’s markets regulator, the Financial Conduct Authority, sent a preliminary penalty notice with a fine of 10 million pounds to Bittar last year for trying to rig benchmark interest rates, a person with knowledge of the situation said in June. The sanction, which would be its largest ever penalty against an individual, was never finalized.