Interdealer brokerage ICAP was fined $87 million on Wednesday for colluding with traders to manipulate Libor, a key interest rate used by banks for short-term lending. Three former employees — Darrell Read, Daniel Wilkinson and Colin Goodman — were also criminally charged by the U.S. Department of Justice with two counts of wire fraud and conspiracy to commit wire fraud.
The U.S. Commodity Futures Trading Commission (CFTC) released examples of email conversations between broker and traders between 2006 and 2010, in which food, drink and even a Ferrari were offered as incentive for rates fixing. Here are some snippets:
October 23, 2006:
Derivatives broker: "Morning Lad (cash broker), On the scrounge again, if possible keep 3m the same and get 6mos as high as you can. My guy has an enormous fix on Wednesday in 6mos and will want it as high as possible.
Waiting for my credit card to get returned to me from a drunken night out bowling, but will be supplying you with copious amounts of curry on it's imminent return. Cheers"
October 25, 2006
Cash broker: Depending where it sets k10 (a restaurant) for lunch or cash would be preferable!!
Out or curry tonite Mlord
Derivatives broker: K10 it is, will get (junior Broker) on the case . . . any chance of 55.25 in 6mos?
December 7, 2007:
Derivatives broker: Hi (cash broker), Thanks again for all your efforts, … Can you do your best to drive these libors higher, especially 3 mos if you can and it is still well bid....UBS had to stagger their move up but will definitely be in the count today. … p.s Bubbly on its way with (senior yen trader).
February 29, 2008:
Derivatives Broker: Make 6m go lower! They r going up. (Senior yen trader) will buy you a ferrari next yr if you move 3m up and no change 6m
June 4, 2007:
Yen desk head: (I need) to cover (cash broker) with future bonus payments that I had to promise him… he said it was all over and he would not help anymore if there was not enough money in it for him…
Sterling Broker: gotcha, thanks, and, if u cud see ur way to a small drop there might be a steak in it for ya, haha
March 3, 2010:
RBS yen Submitter: noted ;-)