The UK's Financial Conduct Authority has banned another trader for manipulating submissions of benchmark rates that banks charge each other for short-term loans, known as LIBOR.
The FCA has banned and publicly censured Paul White for misconduct when submitting RBS’s Japanese yen and Swiss franc rates to the British Bankers Association, which used to administer the London Interbank Offered Rate (LIBOR).
The FCA said in a statement that it would have fined White £250,000 (around $358,000) were it not for his serious financial hardship.
Between March 2007 and November 2010, White was the primary RBS submitter for Japanese yen and Swiss franc LIBOR. During this time, he received 68 documented communications from RBS derivatives traders in these currencies requesting submissions that would benefit their trading positions. He also took into account requests from brokers on behalf of an external Japanese yen derivatives trader when making the relevant RBS LIBOR submissions.
“As a LIBOR submitter Mr White had an obligation to ensure the submissions he made were proper ones. By allowing his submissions to be set, in effect, by those with collateral financial interests in the outcome, Mr White recklessly disregarded the risk – the obvious risk – that his LIBOR submission might corrupt LIBOR’s integrity,” said Mark Steward, director of enforcement and market oversight at the FCA.
“This ban should reinforce the message that working in financial markets entails obligations and responsibilities and that serious failures will result in substantial penalties including fines and prohibitions.”
The industry ban is the FCA’s fourth public action against a trader for manipulating LIBOR submissions. The regulator has so far imposed seven fines, totalling £426 million, on firms for misconduct relating to LIBOR. Last month, it banned Michael Ross Curtler, a former Deutsche Bank trader, from the financial services industry after he was convicted for fraud in the US in connection with LIBOR-rigging.