London

Real estate and the promise of ready money – who cares if the cash is dirty?

The UK welcomes wealthy foreign investors, but does it really care where their money comes from? Estate agents in London’s super expensive neighbourhoods are apparently agreeing to house purchases with ‘corrupt’ Russian politicians.FCA London Property

If you are in the UK, tune in to Channel 4 this evening to watch a revealing documentary about what really goes on between agents and super rich buyers. In ‘From Russia with Cash‘,  undercover reporters pose as an ‘unscrupulous’ Russian government official “Boris’ who wants to buy a house in London for his mistress, ‘Nastya’. Despite ‘Boris’ making is clear to the agents that his funds are not from a legitimate source, the estate agents he deals with are apparently happy to go ahead with the sale and even recommend ways for ‘Boris’ to keep a low profile, according to the Guardian report.

Channel 4’s reporters used hidden cameras to film meetings with estate agents, who talked openly about previous dealings with foreign clients, government ministers – politically exposed persons, and the amount of deals which are made with some degree of anonymity. Politically exposed persons (PEPS) are individuals with access to national coffers, funds which belong to the electorate. They are government officials, their families, their associates and beyond.

Property, or real estate, is widely recognised as the best way to invest. So it should be no surprise that the proceeds of crime have found a natural home in bricks and mortar. Rules on investing and moving dirty cash are well publicised. In the UK and many other countries, Financial institutions, lawyers, accountants, dealers in high value goods and real estate agents are required to report transactions of dubious origin – those which could be hiding the proceeds of crime – to law enforcement. The penalties for not reporting suspicious transactions are severe for the institution and the individual.

Corruption and billionaires  

FCA - TITransparency International’s ‘Unmask the Corrupt‘ campaign looks closely at how UK property launders funds for corrupt individuals, many of whom are politically exposed persons. Funds designated for schools and hospitals – ‘Boris’ claims his money comes from a government health budget – is sent to offshore havens, shrouded in secrecy and then passed on to ‘enablers’ or gatekeepers in the UK who advise and facilitate investment. The thing is, the practice is nothing new. This is how the big money has always moved – the only difference is that now it is under scrutiny.

Forbes, the register of all things super-rich, lists London as third in the world of ‘Billionaire Cities‘.  Five of the remaining nine are Asian cities – Hong Kong, Tokyo, Shanghai, Singapore and Mumbai sit alongside Paris, Moscow, New York and Sydney. If the corrupt are managing to get money into the UK property market, they are certainly managing it in the other countries on this list.

Will the estate agencies and law firms mentioned in this programme be investigated and will this give rise to increased scrutiny of the real estate sector in the UK? Financial Crime Asia is keen to find out.

UK: With Barclays in its sights, can the SFO deliver?

The news that the Serious Fraud Office is about to interview John Varley and Bob Diamond under caution about events that happened almost six years ago, when Barclays obtained a bail-out from Qatar, puts the spotlight on the competence of the SFO and its director, David Green.

His accident-prone agency lost a consignment of sensitive documents last year, paid massive sums to departing executives, and recently was forced to withdraw a case against a high-profile defendant when US lawyers refused to back up its case in London.

Barclays/Qatar is only one of a raft of SFO investigations crawling through the system without any sight of charges, let alone a trial. This is a state of affairs that has poured more ignominy on the country’s lead investigator and prosecutor of big-ticket white collar crime.

Another case stuck in the UK system is Libor, Mr Green’s trophy case for punishing bankers who failed the public in the financial crisis. The SFO has arrested 12 bankers and trumpeted its investigation, but nothing has yet come to trial.

Speaking to The Independent, Mr Green says: “The frustrating thing is that our investigations take time, as do any complex investigations. Once you have charged someone, it then goes into the court system. The first Libor trial will not be until January 2015. We have 12 cases awaiting trial with 36 individual defendants awaiting trial.”

Taxpayers’ money has been used to bring in 60 accountants, lawyers, investigators and other specialists to investigate Libor, but Mr Green hesitates over whether the SFO is really the fighting force to crack it.

“I am fairly confident that we have all the necessary building blocks in place,” he says. “Our intelligence, the quality of our staff, our funding … we have those in place to do the kind of cases we want to do. It doesn’t happen overnight. It is immensely frustrating but it does take time. This is a strategic effort not a tactical one. I well understand people’s impatience.”

Another scandal to have dogged the SFO occurred when its officers carried out an allegedly illegal dawn raid on the property developers Vincent and Robert Tchenguiz. Taxpayers have had to bail out the SFO to pay for its defence, using the blue-chip City law firm Slaughter and May.

Mr Green says that part of the £23m top-up from the Government (on top of its annual £36m) is accounted for by costs in the Tchenguiz litigation, but he doesn’t want to admit how much.

“We haven’t given a breakdown of the sum because it is not, in my view, in the public interest for people out there to know that they have this amount to spend on this investigation. To give a precise breakdown of how much is spent on each case is not appropriate because the people we investigate are well resourced.” Mr Green admits that the legacy from Tchenguiz “is something we have to live with. It doesn’t help the office’s standing”.

He is not complaining, incidentally, about the new offices the taxpayer has provided for him and his team, in the eaves of a government building around the corner from Trafalgar Square. It is a big step up from the pokey old Elm Street offices, by Holborn. But while his office space has greatly expanded, the performance of the SFO likely to be reported in the forthcoming annual report has shrunk. Indeed, one source close to Richard Alderman, the former director, said the number of successful convictions the SFO will have to report will be at a record low.

This comes in the wake of the unsuccessful prosecution of Victor Dahdaleh, the billionaire at the centre of a bribes-for-contracts scandal involving the government of Bahrain.

Mr Dahdaleh walked free after two American lawyers embarrassingly failed to answer a call from the SFO to come and vouch for documents the SFO planned to use in the case. Mr Green says he called up the firm’s senior partner in the US to ask her to put pressure on the lawyers, but she “wasn’t going to force them to attend. They didn’t attend so we were unable to put them before the court”.

Mr Green is highly defensive about some of the headlines that reported this latest SFO disaster. “We don’t accept that we had subcontracted our role to an American law firm, as some of the more lurid headlines suggested. We wanted documentation of certain types from Bahrain, and we were directed to the company’s American lawyers, who had the documentation.”

The failure to bring forward any large cases involving the UK Bribery Act, a draconian statute administered by the SFO that covers bribery throughout the world, is just more evidence of an organisation lacking direction, says one critic. Mr Green can only say: “We’ve got plenty of stuff in the pipeline. We have to work through cases that come under the older legislation, but we also have both under development in our intelligence section and under investigation.” Observers say his promise of cases tomorrow is starting to wear thin.

While the UK has failed to nail either individual fraudsters or corporates – the number of defendants charged with fraud but yet to face trial fell 14 per cent between 2011 and 2013 – hard-nosed US legislation targeted at corporates gets attacked by Mr Green. The US system of deferred prosecution agreements – effectively plea bargaining on an epic scale – is not right on this side of the Atlantic, he says, because the authorities do a deal out of court with the corporate and present it to the judge as a fait accompli with no trial. “It stinks, doesn’t it? It wouldn’t suit our system. The British system is certainly not ‘just a slap on the wrist’,” he insists.

Even so, the wheels of SFO justice are moving slowly and he doesn’t expect any deal with a major corporate to be agreed before the end of the year.

As one lawyer puts it: “The system sucks. People want corporate heads on sticks.”

Source: The Independent

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London and the red carpet for oligarch cash

Here is a good analysis of how the City of London, and the rest of the UK capital, has rolled out the red carpet for foreign oligarchs who have sought refuge in the leafy Royal Boroughs, send their children to be educated in Eton, Harrow, Bedales and Gordonstoun, while banking their billions in the City.

FCA - Russian Flag Big Ben

London’s Laundry Business

LONDON — THE city has changed. The buses are still dirty, the people are still passive-aggressive, but something about London has changed. You can see signs of it everywhere. The townhouses in the capital’s poshest districts are empty; they have been sold to Russian oligarchs and Qatari princes.

England’s establishment is not what it was; the old imperial elite has become crude and mercenary. On Monday, a British civil servant was photographedarriving in Downing Street for a national security council meeting with an open document in his hand. We could read for ourselves lines from a confidential report on how Prime Minister David Cameron’s government should respond to the Crimea crisis. It recommended that Britain should “not support, for now, trade sanctions,” nor should it “close London’s financial center to Russians.”

The White House has imposed visa restrictions on some Russian officials, and President Obama has issued an executive order enabling further sanctions. But Britain has already undermined any unified action by putting profit first.

It boils down to this: Britain is ready to betray the United States to protect the City of London’s hold on dirty Russian money. And forget about Ukraine.

Britain, open for business, no longer has a “mission.” Any moralizing remnant of the British Empire is gone; it has turned back to the pirate England of Sir Walter Raleigh. Britain’s ruling class has decayed to the point where its first priority is protecting its cut of Russian money — even as Russian armored personnel carriers rumble around the streets of Sevastopol. But the establishment understands that, in the 21st century, what matters are banks, not tanks.

The Russians also understand this. They know that London is a center of Russian corruption, that their loot plunges into Britain’s empire of tax havens — from Gibraltar to Jersey, from the Cayman Islands to the British Virgin Islands — on which the sun never sets.

British residency is up for sale. “Investor visas” can be purchased, starting at £1 million ($1.6 million). London lawyers in the Commercial Court now get 60 percent of their work from Russian and Eastern European clients. More than 50 Russia-based companies swell the trade at London’s Stock Exchange. The planning regulations have been scrapped, and along the Thames, up go spires of steel and glass for the hedge-funding class.

Britain’s bright young things now become consultants, art dealers, private banker and hedge funders. Or, to put it another way, the oligarchs’ valets.

Russia’s president, Vladimir V. Putin, gets it: you pay them, you own them. Mr. Putin was absolutely certain that Britain’s managers — shuttling through the revolving door between cabinet posts and financial boards — would never give up their fees and commissions from the oligarchs’ billions. He was right.

In the austerity years of zero growth that followed the 2008 financial crash, this new source of vast wealth could not be resisted. Tony Blair is the latter-day embodiment of pirate Britain’s Sir Walter Raleigh. The former prime minister now advises the Kazakh ruler Nursultan Nazarbayev on his image in the West. Mr. Blair is handsomely paid to tutor his patron on how to be evasive about the crackdowns and the mine shootings that are facts of life in Kazakhstan.

This is Britain’s growth business today: laundering oligarchs’ dirty billions, laundering their dirty reputations.

It could be otherwise. Banking sanctions could turn off the financial pipelines through which corrupt officials channel Russian money. Visa restrictions could cut Kremlin ministers off from their mansions. The tax havens that rob the national budget of billions could be forced to be accountable. Britain has the power to bankrupt the Putin clique.

But London has changed. And the Shard — the Qatari-owned, 72-floor skyscraper above the grotty Southwark riverside — is a symbol of that change.

The Shard encapsulates the new hierarchy of the city. On the top floors, “ultra high net worth individuals” entertain escorts in luxury apartments. By day, on floors below, investment bankers trade incomprehensible derivatives.

Come nightfall, the elevators are full of African cleaners, paid next to nothing and treated as nonexistent. The acres of glass windows are scrubbed by Polish laborers, who sleep four to a room in bedsit slums. And near the Shard are the immigrants from Lithuania and Romania, who broke their backs on construction sites, but are now destitute and whiling away their hours along the banks of the Thames.

The Shard is London, a symbol of a city where oligarchs are celebrated and migrants are exploited but that pretends to be a multicultural utopia. Here, in their capital city, the English are no longer calling the shots. They are hirelings.

Ben Judah is the author of “Fragile Empire: How Russia Fell In and Out of Love With Vladimir Putin.”

Source: The New York Times

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Sanctions: EU heads meet to discuss Ukrainian sanctions, PEP names discussed

The Crimean crisis gained considerable ground over the weekend, as Russian military troupes seized control of the Black Sea peninsula, the Russian naval fleet’s stronghold on the Black Sea. The EU has responded by calling an emergency meeting of Heads of State in Brussels to discuss the latest developments in Ukraine and how to facilitate the necessary de-escalation of the situation. John Kerry, the US envoy will land in Kiev for talks with leaders today, as announced on Twitter.

International envoys to Kiev

As of Tuesday, the US, backed by some Eastern European nations and Sweden, wants to impose punitive measures on Moscow and Washington is reportedly reviewing its trade packages with Moscow. The US, via the Office of Foreign Assets Control, has mentioned imposing diplomatic – travel,communications, closing embassies – and economic – trade, account and asset freezes, transaction prohibitions – sanctions against Russia if it does not pull out of the Crimea. FCA - KYIV Sanctions banner

The Foreign Ministers of France, Germany, Italy and Spain are downplaying trade sanctions in favour of halting travel visa easing rules with Russia. It is notoriously difficult, still, to get a visa to travel independently and without a planned itinerary in Russia. Reciprocally, the EU makes acquiring a Schengen visa difficult for average Russians. Oligarchs, however, appear to have no difficulty in getting visas to stay in the UK.

UKs embarrassing damage limitation

The UK’s position on Russian sanctions was leaked in a document on Monday this week. Unsurprisingly, but rather disappointingly nonetheless, Number 10 Downing Street is carefully trying to figure out how it can limit the damage EU sanctions may cause to the Russian owned billions floating around the City of London. This must have been quite a snub to the EU, coming only days after HSBC in London revealed its plans to circumvent EU bonus rules.

One of the UK government’s objectives was noted in an exposed secret document as: “Not support, for now, trade sanctions … or close London’s financial centre to Russians.”

Ukrainian cash flows

While the political games are playing out in cabinet rooms, banks and money laundering reporting officers should be on high alert for funds surging out of the Ukraine or transferring between the accounts of Ukrainian politically exposed persons (PEPs).

Yanukovich and Sons,

Yanukovich and Sons,

Switzerland, Liechtenstein and Austria have already frozen accounts linked to ousted President Viktor Yanukovich and his son Aleksandr (also spelled  Oleksander) and 12 other Ukrainians. Prosecutors in Geneva are investigating transactions between firms connected to Aleksandr in Ukraine, Switzerland and the Netherlands.

Austria has frozen the assets of  18 Ukrainian citizens including Viktor Yanukovich, “former chief of staff Andriy Klyuev, but not his brother Serhiy.” In the same Reuters’ article, one veteran Austrian banker estimated that while Austria is of interest, far more Ukrainian money has been placed in Switzerland and the UK.

Names

The EUObserver portal posted a list of potential sanctions targets last week. Importantly, this is not the final list of targets; the identities of the individuals sanctioned by the EU will appear in the EU’s official journal once they had been decided. Economic and financial sanctions from the EU could include export and/or import bans (trade sanctions which may apply to specific products such as oil, timber or diamonds), bans on the provision of specific services (brokering, financial services, technical assistance), flight bans, prohibitions on investment, payments and capital movements, or the withdrawal of tariff preferences.

The list includes 38 names of individuals suspected of using force against the Ukrainian people in the recent revolution and members of the so-called Yanukovich ‘familia’ – a close group of contacts which surrounded the ex-President – suspected of embezzling more than EUR9bn from the national coffers since 2010.

Anyone reading the list for information should bear in mind the following caveat:

“The following names were given to this website by Ukrainian civil society activists and opposition leaders, some of whom advised the EU diplomats who drew up the draft list of eight names. EUobserver does not know who is currently designated in the confidential EU text.”

 

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The EU bonus rule work-around

New European rules limiting bankers bonuses to one or two times their salaries is posing a challenge to a handful of bank giants, FCA - bonuses champagneaccording to this article in the NYTimes DealBook, who are looking for a work-around solution which will keep their extremely highly paid employees on-side. Of course, there is a huge risk that the “role-based pay”, as it is being dubbed, would undermine the essence of the regulations, stymieing plans to pay bonuses on a deferred time frame and in shares, which would allow banks to keep funds if the deals go bad.

Banks in London Devise Way Around Europe’s Bonus Rules

LONDON — A battle over banker bonuses is building in this financial capital.

Since the 2008 crisis, regulators around the world have tried to rein in bonuses, worried that big payouts encourage excessive risk-taking by bankers and traders. The European Union has gone further than most, limiting bankers to bonuses equal to one or two times their salaries.

But the bank giants operating in London — including Goldman SachsBank of America Merrill Lynch and Barclays — are seeking to outflank the new restrictions. Responding to the law, they are structuring new pay packages that try to satisfy both their emboldened regulators and their very expensive employees.

So goodbye, big bonus.

Hello, role-based pay.

Other banks have called their new payments “allowances.” At least one labeled it “reviewable salary.”

One of the European lawmakers who led the push for bonus caps is not buying the semantic somersaults.

“These are bonuses in disguise,” said Philippe Lamberts, a Belgian member of the Green Party in the European Parliament. “I wonder how they will hold up in a court of law.”

“These are bonuses in disguise,” said Philippe Lamberts, a Belgian member of the Green Party in the European Parliament.Sakis Mitrolidis/Agence France-Presse — Getty Images“These are bonuses in disguise,” said Philippe Lamberts, a Belgian member of the Green Party in the European Parliament.

The banks are nonetheless pressing on with the changes, with the goal of making sure their top talent in Europe gets paid.

Yet as the banks tie themselves in knots to comply with the bonus cap law, the new pay packages may undermine what bank regulators worldwide have sought to do for nearly six years: force banks to stagger the payment of bonuses over much longer periods. Such deferrals, as they are known on Wall Street, enable the money to be taken back if bets go bad.

“This may leave us not just no better off, but worse off from the management of systemic risk,” said Andrew Tyrie, chairman of the Treasury Select Committee and a Conservative member of Parliament. The commission on banking standards that he led concluded, among other issues, that compensation needed to include longer deferrals and more take-backs to discourage excessive risk-taking.

But the new structures — which do not entirely replace bonuses — pay more upfront and leave less available to take back.

“It doesn’t chime well with what regulators are asking banks to do,” said Jon Terry, head of the global financial services human resources leader at PricewaterhouseCoopers in London, which is working with many of the leading banks.

Bank executives and many leading political figures in Britain say that the bonus-cap law, which applies to European banks and the European operations of global banks, will drive up their fixed costs of compensation by forcing them to pay more in annual salary.

It also creates an unfair playing field, they say, noting that bankers and traders in New York, Hong Kong or Singapore face no such constraints.

“It makes London less competitive against the U.S. and Singapore and anywhere outside the E.U.,” said Stephen Brooks of the PA Consulting Group in London. “That’s a disadvantage to the E.U.”

For the moment, the banks in London have an ally in the British government, which is suing to block the law, saying that theEuropean Commission has overstepped its authority. (Banker compensation is important to the British government, which gets 60 cents of every bonus dollar in the form of taxes and national insurance, according to Mr. Brooks.)

And British regulators so far seem comfortable with the new pay structures, with banks including Barclays and Goldman Sachs indicating in memos to employees and internal conversations that they have conferred with their regulator on the pay packages.

The 2013 European law limits certain bankers to bonuses equal to one times their salary, or two times if shareholders approve it. It defines what is considered fixed pay and what is variable pay, more commonly known as bonuses.

The banks were clearly in a bind. Data from the European Banking Authority show that in 2012 top bankers earned bonuses of two and a half to five and a half times as much as their salaries. In 2012, for example, Goldman Sachs paid its 115 so-called code staff employees in Europe — those to whom the caps apply — $86.1 million in salary and $450.7 million in cash and stock bonuses. That averages to about $4.7 million in total compensation for each person, with the bonus equal to 5.2 times as much as the salary.

But bank executives and their lawyers and consultants spotted an opening in the rigid definitions, with payments that are neither fixed, like a salary, nor variable, like a bonus.

For example, such payments may be made weekly, monthly or semiannually — like a salary — but they cannot be applied to pensions, making them more like a bonus. For some, the amounts will be reset every year, like a salary, and for others, it can vary with the economic environment, or a banker’s new role, like a bonus.

The British regulator has told the banks that the payments will most likely pass muster if they are noncontractual and not based on performance, according to compensation consultants, bank officials and lawyers. This is a bit of a turnaround for an industry that believes its extraordinarily high compensation is justified on the basis of exceptional performance.

A spokeswoman for the Prudential Regulatory Authority, which is an arm of the Bank of England and regulates the banks, declined to comment.

Antony P. Jenkins, Barclays’ chief executive, said this week that role-based pay was “not performance-related, but an adjustment to fixed pay.” After announcing a drop in profits and job cuts, Mr. Jenkins defended the decision to increase the investment bank’s bonus pool by 13 percent.

“Barclays does not set competitive rates in the marketplace,” he said, insisting that it was in the interest of shareholders to attract and retain top talent (though he waived his own bonus of £2.7 million, or $4.5 million). The move prompted some corporate governance experts to question, “for whom is this institution being run?” as Roger Barker, head of corporate governance at the Institute of Directors, put it.

Payments to employees that are of similar size to bonuses are expected to raise many questions. Traditionally, traders have been paid largely on the basis of their business unit’s profits. Healthy employee incentives could be undermined if large sums were being paid out on the basis of broader measures like the wider economic environment or a person’s job description. Shareholders, in particular, might protest. The unorthodox payments come at the same time that British regulators have been trying to press banks to repair their ethical culture.

At a hearing last year, Andrew Bailey, the chief of the Prudential Regulation Authority, described one unintended effect of the bonus cap. “It will also institute an unhelpful culture of banks spending their time finding ways around the rules,” he said.

His prediction did not take long to come true. Barclays, for example, explained its new role-based pay in a memo to employees in November. The pay, the memo said, would allow the bank to comply with the European legislation and offer “competitive market compensation to employees.” In January, Bank of America Merrill Lynch told its client-facing managing directors in London that they would get a 20 percent pay raise to $500,000 (£303,000).

While the law came from the European Parliament, the recently created European Banking Authority is charged with defining to whom the law applies. It is now writing guidelines to further clarify what constitutes “fixed and variable” compensation.

Both the authority and the European Commission can investigate noncompliance, and the commission can bring a case to the European Court of Justice. This raises the risk of regulatory penalties to banks trying to make bonuses look like other types of pay.

“We expect all banks to comply strictly with European rules on bonuses, and continuous talk about how to circumvent the rules is disturbing,” said Michel Barnier, Europe’s commissioner for overseeing financial services.

Jenny Anderson reported from London, and Peter Eavis from New York.

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LIBOR scandal: traders’ messages made a mockery of market conduct rules

The Died Laughing Cavalier

The US Department of Justice, the Commodity Futures Trading Commission, the UK’s Financial Conduct Authority and the Dutch Financial Markets Authority have fined Rabobank US$1bn altogether for manipulating the LIBOR and EURIBOR rates. Rabobank is the latest institution to be exposed in the rigging scandal. Rabobank’s Chief Executive Piet Moerland resigned yesterday, shocked and appalled by the cavalier language used by traders at Rabobank when they were fixing LIBOR and EURIBOR rates. The messages recorded between traders makes for depressing reading, at times admitting the LIBOR and EURIBOR submissions were both  “obseenly high” (sic) and “silly low.” This was coupled with references to collusion such as “scratch my back, yeah” to which a broker observed, “Yeah oh definitely, yeah, play the rules.” The traders and brokers involved in the LIBOR and EURIBOR rigging saw their efforts as a game, played with someone else’s money while allowing them to line their own pockets. The cavalier attitude in the messages openly mock the financial system and attempts at regulation and throw the actions of government and regulators into very sharp relief. Piet Moerland has set an example by standing down as CEO. Rabobank was established as a co-operative, which turned into a cartel benefiting those who ran the bank, rather than its clients and shareholders. Here’s a reminder of what ex-RBS Chief Steven Hester said about LIBOR rigging back in February. http://www.youtube.com/watch?v=EzqVwhMG09Q The UK and US regulators have so-far called Rabobank’s misconduct ‘unacceptable’ and have promised that investigations are ‘far from over.’ I bet the traders are quaking in their handmade leather boots. Regulators’ statements in brief From the FCA Rabobank’s poor internal controls encouraged collusion between traders and LIBOR submitters and allowed systematic attempts at benchmark manipulation. Rabobank did not fully address these failings until August 2012, despite assuring the FCA in March 2011 that suitable arrangements were in place. Tracey McDermott, the FCA’s director of enforcement and financial crime said: “Rabobank’s misconduct is among the most serious we have identified on LIBOR. Traders and submitters treated LIBOR submissions as a potential way to make money, with no regard for the integrity of the market. This is unacceptable. FCA Press Release From the US DOJ The DOJ has entered a deferred prosecution agreement with the bank, requiring the bank to admit and accept responsibility for the extensive manipulation of the reference rate. “For years, employees at Rabobank, often working with traders at other banks around the globe, illegally manipulated four different interest rates – Euribor and LIBOR for the U.S. dollar, the yen, and the pound sterling – in the hopes of fraudulently moving the market to generate profits for their traders at the expense of the bank’s counterparties,” said Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.  “Today’s criminal resolution – which represents the second-largest penalty in the Criminal Division’s active, ongoing investigation of the manipulation of global benchmark interest rates by some of the largest banks in the world – comes fast on the heels of charges brought against three former ICAP brokers just last month.  Rabobank is the fourth major financial institution that has admitted its misconduct in this wide-ranging criminal investigation, and other banks should pay attention: our investigation is far from over.” US DOJ Press Release From the CFTC From at least mid-2005 through early 2011, Rabobank traders engaged in hundreds of manipulative acts undermining the integrity of U.S. Dollar and Yen LIBOR, Euribor and, to a lesser extent, Sterling LIBOR. The violations took various forms: Rabobank traders, some of whom doubled as LIBOR and Euribor submitters, regularly made and accommodated their fellow traders’ requests to make favorable rate submissions to benefit their trading positions through attempts to manipulate U.S. Dollar and Yen LIBOR and Euribor. On occasion, they did the same with respect to Sterling LIBOR. Making submissions that were, as some Rabobank employees said at the time, “ridiclous,” “obseenly high” and “silly low,” more than two dozen traders, including several desk managers and at least one senior manager located in Rabobank’s New York, London, Utrecht, Tokyo, Hong Kong, and Singapore offices engaged in this wrongful conduct or knew it was ongoing at the time but did nothing to stop it. CFTC release