“Sometimes ISDAfix is manipulated.”
Bloomberg News reports that those words, taken from an e-mail written by a Barclays options trader, came back to haunt the bank Wednesday as it settled U.S. government allegations that it attempted over five years to rig one of the world’s most important rate benchmarks.
The Commodity Futures Trading Commission released some of the more than 1m e-mails and recorded phone calls gathered during its nearly three-year investigation to show how the attempted manipulation worked.
It was a simple process, according to the CFTC: Barclays traders told their brokers to buy or sell as many interest-rate swaps as needed just before 11 a.m. New York time to push the benchmark in the desired direction.
On September 10, 2008, as the global financial system teetered on the brink of its worst crisis since the Great Depression, another Barclays trader watched a colleague trade. He was impressed.
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