International law enforcement agencies are close to arresting traders under suspicion of attempting to manipulate inter-bank interest rates.
Barclays is the first bank to have settled with financial regulators over attempted Libor manipulation paying fines of £290m
US prosecutors and their European peers are understood to have contacted defence lawyers representing traders at banks such as Royal Bank of Scotland, Barclays and UBS to notify them arrests are imminent.
Prosecutors in Washington DC are understood to be furthest advanced towards making arrests. In the UK the Serious Fraud Office has said it will investigate the alleged manipulation of Libor and other interest rate benchmarks but has yet to make decision over whether there is enough evidence to prosecute.
Arrest and criminal charges are expected to be made within the coming weeks.
"The individual criminal charges have no impact on the regulatory moves against the banks," a European source familiar with the matter told Reuters. "But banks are hoping that at least regulators will see that the scandal was mainly due to individual misbehavior of a gang of traders."
The potential arrests will put more pressure on the SFO to take action in the UK. However it is still uncertain whether the UK white collar crime agency will be able to bring a prosecution. The Financial Services Authority is understood to have looked at the possibility and discarded it.
A legal expert invovled with at least one of the potential suspects said: “The problem for the UK authorities will be in proving that Libor was manipulated, the standard required for a criminal conviction, as opposed to showing attempts were made.”
The US and European authorities are understood to be analysing emails between a ring of traders that they suspect of colluding to manipulate Libor. The emails could form a key part of any prosecution.
It is not certain at this point which banks the individuals worked for. Most of them are understood to have already moved on to different employers
Statistics: Posted by DIGGER DAN — Tue Jul 24, 2012 6:48 am