Ex-Lloyds Libor Traders Said to Face Questioning by U.K. SFO

  • Prosecutor called in traders for interviews under caution
  • SFO has been investigating Libor manipulation for five years

U.K. prosecutors have called in a number of former Lloyds Banking Group Plc Libor traders for questioning over manipulation of the benchmark rate, more than two years after the bank was fined nearly $400 million over the scandal.

The Serious Fraud Office asked the traders to come in for interviews under caution in recent months, said two people with knowledge of the situation, who didn’t want to be identified because the questioning is private. Interviews under caution are generally conducted with possible suspects and anything a person says can be used in court.

Lloyds was fined about $380 million in July 2014 by U.K. and U.S. authorities for attempting to manipulate the U.S. dollar, sterling and yen Libor rates to suit the bank’s own positions and make the lender appear more stable during the financial crisis. The U.K. Financial Conduct Authority said at the time that 16 individuals were involved in the misconduct. The fine also included attempts to manipulate rates other than the benchmark.

The Lloyds case is one of a number of strands still under investigation in the wider SFO Libor probe. The prosecutor is also still investigating yen Libor manipulation by co-conspirators of Tom Hayes, the former UBS AG and Citigroup Inc. trader who became the first person to be convicted at trial over Libor in 2015. Another strand is looking at whether Barclays Plc lowballed its Libor submissions during the 2008 financial crisis.

A spokeswoman for the SFO declined to comment. A spokesman for Lloyds said the bank was “unable to comment on speculation regarding possible ongoing investigations.”

Settlement

The FCA settlement with Lloyds in 2014 included examples of traders’ attempts to collude with employees at Rabobank Groep to influence the yen Libor rate. A number of Rabobank traders have been charged and convicted over Libor-rigging by the U.S. Justice Department. Lee Stewart, a British former Rabobank derivatives trader, last month avoided a prison sentence in the U.S. by pleading guilty and testifying against a number of former colleagues.

The SFO has charged 24 individuals over manipulation of Libor and other related benchmark rates from firms including Barclays, Deutsche Bank AG, TP ICAP Plc and Societe Generale SA. Five have been convicted so far.

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