banking

RBS said to fire derivatives trader weeks after Libor fine

BLOOMBERG FILE PHOTO/SIMON DAWSON
THE ROYAL BANK OF SCOTLAND Group Plc dismissed a London-based interest-rates trades, weeks after settling with regulators of its part in the Libor scandal.
Posted 4/11/13

TOKYO – Royal Bank of Scotland Group PLC dismissed a London-based interest-rates trader, weeks after settling with regulators over its part in the Libor scandal, two people with knowledge of the situation said.

Simon Green, who traded derivatives tied to short-term moves in interest rates in dollars and euros, was fired last month, said the people, who asked not to be identified because the matter hasn’t been made public. He is the seventh individual to be dismissed from the bank for Libor-related misconduct, one of the people said. Officials at the Edinburgh-based lender declined to comment.

Green, who joined RBS as a trainee in 2002, has been listed as inactive since Feb. 26 on the U.K. regulator’s register of approved individuals. He couldn’t be located yesterday through directory searches and a message left with a LinkedIn account with the same name wasn’t returned.

RBS was fined $612 million by U.K. and U.S regulators on Feb. 6 for making hundreds of attempts to rig rates including yen, Swiss franc and U.S. dollar Libor from 2006 to 2010. More than a dozen banks and brokers are being probed around the world for manipulating benchmarks including the London interbank offered rate, which underpins at least $300 trillion of financial contracts from derivatives to student loans.

‘Disciplinary process’

RBS said in February it had dismissed six individuals, including two managers, following an internal probe. Eight more left before disciplinary action could be taken, while an additional six were “severely disciplined” or were “going through a disciplinary process,” the bank said. Green is one of the latter six, one of the people said. In all, 21 employees have left, been disciplined or are facing disciplinary action over rate-rigging.

Separately, RBS Securities Japan Ltd. CEO Ryusuke Otani is preparing to resign as the company faces further censure for rate rigging, according to two people with knowledge of the situation. Atsuko Yoshitsugu, a Tokyo- based spokeswoman for RBS, said Otani wasn’t available to comment as he is on “compliance leave.”

The Japanese Financial Services Agency will announce penalties including a business-improvement order as early as tomorrow, the people said. The agency oversees the Securities and Exchange Surveillance Commission, which on April 5 recommended administrative action against the unit. Hiroshi Okada, an FSA spokesman, declined to comment.

Libor is determined by a daily survey that asks banks to estimate how much it would cost them to borrow from each other for different time-frames and in different currencies. The top and bottom quartiles are excluded and an average is taken of the remaining quotes. Traders sought to influence where the rate was set to boost the profits of their derivatives positions, regulators found.

Regulators including the Commodity Futures Trading Commission are now investigating whether other financial benchmarks were manipulated. The Washington-based CFTC is probing brokers at ICAP Plc and as many as 15 banks over the alleged manipulation of interest-rate swap prices used as a benchmark in the $379 trillion market.

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