Societe Generale Bankers Charged in U.S With Libor RiggingBy
Pair ordered subordinates to submit bogus rates, U.S. says
Foreign prosecutions tougher for U.S. after convictions tossed
Two Societe Generale SA bankers in France were charged in New York with rigging the London interbank offered rate and allegedly causing more than $170 million in harm to the global financial markets.
The indictments come as U.S. prosecutors press ahead with a seven-year international probe into manipulation of the benchmark rate despite a recent setback that makes it tougher for them to win cross-border cases.
Danielle Sindzingre, 54, and Muriel Bescond, 49, are accused of ordering subordinates to submit fake U.S. dollar Libor rates so it seemed the bank was able to borrow at a lower interest rate. The submissions “artificially reduced” the U.S. dollar Libor fix, affecting millions of financial transactions tied to the U.S. currency, U.S. prosecutors said.
Libor is a daily estimate of borrowing costs among the world’s biggest banks. It’s used to value trillions of dollars of financial products, including mortgages, commercial loans and derivatives.
The allegations suggest “complete and total disregard for the integrity of the financial markets and for innocent consumers and everyday people whose personal finances hinge on the interest rates they pay on various loans,” said Acting Assistant Attorney General Kenneth Blanco of the Justice Department’s Criminal Division.
It couldn’t be immediately determined whether Sindzingre and Bescond have hired lawyers.
Societe Generale said in a statement Friday that it received formal requests for information from several authorities, including the Justice Department, in connection with Libor investigations. The bank said it’s cooperating.
U.S. prosecutors suffered a setback last month when a New York appeals court tossed out the convictions of two former London-based Rabobank Groep traders for manipulating Libor. The three-judge panel said prosecutors improperly used testimony the traders were forced to provide in the U.K. in order to build the U.S. criminal case.
The government had said that prohibiting the U.K. testimony would seriously hamper the prosecution of criminal conduct that crosses international borders.
Sindzingre is Societe Generale’s global head of treasury while Bescond heads the Paris treasury desk. They’re charged with conspiracy and four counts of transmitting false, misleading and knowingly inaccurate commodities reports.
The case is U.S. v. Sindzingre, 17-cr-464, U.S. District Court for the Eastern District of New York (Brooklyn).