The U.S. Justice Department is preparing cases against former Deutsche Bank AG employees for Libor manipulation and could bring charges before year’s end, according to two people with knowledge of the situation.
The agency is investigating at least five former traders for rigging the U.S. dollar version of the interest-rate benchmark, said the people, who asked not to be identified because the talks are private. The charges would be the first against traders from the German lender in relation to the London interbank offered rate.
Deutsche Bank entered into a record $2.5 billion global settlement with agencies, including the Justice Department, in April for manipulating Libor and similar benchmarks. Twelve banks have paid about $9 billion in penalties in relation to interest-rate rigging over the last three years. Twenty-one traders have been charged in the U.K. and the U.S. with the first trial under way in London.
Deutsche Bank employees responsible for products linked to dollar Libor were primarily based in London and New York. Extracts of chats published in the bank’s accord with the Justice Department show dollar traders requesting moves in the rate.
“if you need something in particular in the libors i.e. you have an interest in a high or a low fix let me know and there’s a high chance i’ll be able to go in a different level,” said one dollar Libor submitter in London to a New York trader in 2005.
Peter Carr, a Justice Department spokesman, declined to comment. A spokeswoman for Frankfurt-based Deutsche Bank declined to comment.
Libor charges have so far focused on traders who affected yen Libor and dollar Libor. Six former Barclays Plc dollar traders were charged by the U.K. Serious Fraud Office last year and are scheduled to go on trial in January.
Deutsche Bank was criticized by regulators over its handling of the Libor investigations. The lender’s fine was doubled by the U.K. Financial Conduct Authority for providing an “unacceptably slow and ineffective response” to questions and repeated “false, inaccurate or misleading” statements to the watchdog.
Deutsche Bank has been mired in a string of scandals in recent years and, most recently, possible money laundering breaches in Russia. Former co-chief executive officer Anshu Jain stepped down after three years on June 30.
Deutsche Bank shares rose 3.9 percent, or 1.057 euros to 28.425 euros at 4:27 p.m. in Frankfurt trading.
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