Global Libor investigation
Investigators from the Serious Fraud Office (SFO) interviewed the head of Barclays in Japan, Mark Dearlove, last month as part of its investigation into Libor rigging; a sign that more senior executives are coming under scrutiny in the global probe. According to the FT, which broke the news, two other Japanese executives are also part of the investigation but none of the three has been arrested or charged.
Whereas earlier Libor investigations focused on how banks rigged rates to boost their profits, the FT reports that this strand of the investigation is looking into whether Barclays lied about its borrowing costs during the Libor calculation process in order to appear in a better position to investors. Other senior bank employees have reportedly also been questioned as part of the investigation.
A painstaking investigation into the scandal has been going on for years and only last month Barclays was among several European and US banks to be fined after a four-year probe by the Swiss competition commission for attempting to rig Libor rates. Meanwhile, in 2012, following a substantial forensic investigation in the UK and US, multiple criminal settlements by Barclays revealed significant fraud and collusion by member banks connected to the rate submissions.
Of course, the investigations were not limited to Barclays; it is believed that regulators in at least 10 countries on three continents have investigated the rigging of Libor (and other interest rates) and around 20 major banks have been named in court cases. The investigations unearthed communication ranging from instant messages to memos between bankers and traders, which proved that the rate had been manipulated. The weight of the evidence amassed by the forensic investigators and forensic accountants was so compelling that six banks were eventually fined £3.9bn in 2015 by UK and US authorities. However, it now appears that the investigation is nowhere near its conclusion.
Author: Roger Isaacs, 6 January 2017