Royal Bank of Scotland Japan unit sentenced in Libor probe

Royal Bank of Scotland Group PLC was ordered to pay $50 million by a federal judge in Connecticut as part of a settlement for rigging the London interbank offered rate. More

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Royal Bank of Scotland Japan unit sentenced in Libor probe

BLOOMBERG FILE PHOTO/SIMON DAWSON
A FEDERAL JUDGE IN CONNECTICUT has ordered a division of Royal Bank of Scotland to pay $50 million to help settle charges that employees of the bank rigged the London interbank offered rate over a number of years.
Posted 1/6/14

NEW YORK - Royal Bank of Scotland Group PLC was ordered to pay $50 million by a federal judge in Connecticut as part of a settlement for rigging the London interbank offered rate.

RBS Securities Japan Ltd., a unit of the bank, in April pleaded guilty to wire fraud as part of a settlement of more than $600 million with U.S and U.K. regulators over Libor manipulation and agreed to pay the fine, according to court filings.

U.S. District Judge Michael P. Shea in New Haven, Conn., Monday sentenced the Tokyo-based unit of RBS, Britain’s biggest publicly owned lender, to pay the agreed-upon fine, according to a Justice Department statement.

RBS, based in Edinburgh, Scotland, agreed in February to pay $325 million to the U.S. Commodity Futures Trading Commission, $150 million to the Justice Department and 87.5 million pounds ($137 million) to the U.K.’s Financial Services Authority for manipulating benchmark interest rates.

“Today’s sentencing of RBS is an important reminder of the significant consequences facing banks that deliberately manipulate financial benchmark rates,” Acting Assistant U.S. Attorney General Mythili Raman said in a statement.

Daily poll

Libor is calculated by a poll carried out daily on behalf of the British Bankers’ Association that asks firms to estimate how much it would cost to borrow from each other for different periods and in different currencies. The top and bottom quartiles of quotes are excluded, and those left are averaged and published for individual currencies before noon in London.

As part of the plea agreement, RBS Securities Japan accepted responsibility for the misconduct of certain derivatives traders who tried to influence published yen Libor rates by seeking adjustments to the bank’s submissions from as early as 2006 through at least 2010, according to a joint sentencing memorandum filed in the case last month.

The misconduct involved about 20 RBS traders, about four of whom worked for RBS Securities Japan, according to the sentencing memo. The head of the unit, Ryusuke Otani, left the firm on the same day its plea agreement was filed.

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