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Investigative Accountants Going Global – 14th December 2012

Member: Nifa

After As the investigation into wrongdoing over the rigging of the Libor rate continues, international regulators have now uncovered evidence leading to the arrest of two executives at broker RP Martin, while another brokerage has been asked to provide information to the investigators. The ever-widening investigation has led to more people being dragged into the regulatory net, despite, until now, only high street banks being accused of rigging the London interbank offered rate (Libor).

Now Hong Kong is to investigate possible rigging by UBS, shortly after the Swiss bank agreed to pay £940m to regulators for trying to manipulate the key rate on an “epic scale” and two former traders at the bank have been charged with conspiracy to manipulate the rate. In the second-largest banking fine ever, this week UBS was fined by Swiss, British and US regulators after an investigation revealed evidence of massive misconduct in the setting of the rate, a global reference that affects trillions of dollars, loans and mortgages.

The Hong Kong Monetary Authority said it had begun an investigation to assess whether the potential misconduct had any material impact on Hibor, the Hong Kong rate, which is considered a key benchmark interest rate for economies in the region.  The authority has said it will work with overseas regulators to gather information and “consider further actions that need to be taken” pending the findings of the investigation.

The Serious Fraud Office began its official investigation into the rigging of the Libor rate back in July, when Chief Secretary to the Treasury Danny Alexander said that he wanted the regulator to “follow the evidence wherever it goes” and to bring prosecutions where possible.  

It now looks as though forensic investigators will be following the trail for a longer way than previously thought and potentially for a very long time.

Author: Roger Isaacs, 14th December 2012

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