A senior banker from a leading British bank has become the first person in the UK to plead guilty to conspiracy to defraud in connection with manipulating Libor.
The person, who cannot be named, appeared at Southwark Crown Court on Friday.
It follows a Serious Fraud Office (SFO) investigation into the alleged rigging of Libor, the benchmark interbank lending rate and marks the first UK criminal conviction arising from the investigation.
Eleven other individuals stand charged and await trial.
The US has already secured two guilty pleas from former rates traders at Rabobank as part of its own criminal investigation into Libor rigging.
US and UK investigations into Libor have already led to a series of heavy fines for several major banks.
Libor – the London inter-bank offered rate – is the benchmark figure used as the basis for vast amounts of money globally.
Its potential for manipulations were revealed in the wake of the financial crisis.
The revelations seriously undermined the foundation of the system, which was overseen by the British Bankers’ Association.
A number of regulators around the world launched their own investigations, and they also spread to the European benchmark equivalent – Euribor.
A total of seven banks and brokerage firms have already reached settlements over rate-rigging allegations.
Last month Lloyds Banking Group said it had dismissed eight staff and was withholding bonuses due to vest, as part of a new scheme known as clawback.
Lloyds settled penalties and fines totaling £218m in the UK and US over the issue.
Regulators around the world are also examining the possible manipulation of the foreign exchange market.
In metal exchanges, silver pricing has been transferred to a new system to avoid potential manipulation, and the so-called gold-fix is due to be changed from its century-old valuation.
Collectively, the revelations and overhauls deemed necessary have undermined public and governmental trust in the whole finance sector, whose riskiest elements prompted massive bailouts amid the global crisis of 2008.
The Telegraph
