Royal Bank of Scotland managers are said to have condoned and participated in the manipulation of global interest rates, indicating that wrongdoing extended beyond the four traders the bank has fired.
Bloomberg reports that RBS traders and their managers routinely sought to influence the firm’s Libor submissions between 2007 and 2010 to profit from derivatives bets, according to employees, regulators and lawyers interviewed by Bloomberg News. Traders also communicated with counterparts at other firms to discuss where rates should be set, one person said.
'This kind of activity was widespread in the industry', said David Greene, a senior partner at law firm Edwin Coe LLP in London. 'A lot of the traders didn’t consider this behavior to be wrong. They took it as the practice of the trade. This is how things operated, and it seemed harmless'.
Regulators are now probing RBS’s yen, Swiss franc and U.S. dollar sales-and-trading businesses, all part of the fixed-income division Fred Goodwin expanded before he was ousted as CEO in 2008, said two people who asked not to be identified because the bank’s internal investigation, begun more than two years ago, is still in progress. Investigators are focusing on the firm’s swaps, inflation-trading and foreign-exchange teams, as well as on money-market traders who made daily Libor submissions, the people said.
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