Serious Fraud Office ends Lloyds Libor probes

Lloyds Bank

The Serious Fraud Office (SFO) has dropped a criminal investigation into Libor manipulation at Lloyds Banking Group, removing a cloud over the lender.

The SFO dropped the case because it lacked evidence, despite the Financial Conduct Authority’s previous assertion that 16 individuals at Lloyds knew about the Libor fixing. Some lines of inquiry in the investigation are still open.

Lloyds was fined in 2014 for £105m in part because of manipulation of Libor (the London Interbank Offered Rate), a key “risk-free” interest rate still used to benchmark trillions of pounds of contracts.

Read more: Tribunal raps 'troubling' FCA conduct in UBS Libor rigging probe

The SFO has written to “certain individuals” in the Libor investigation to tell them that they are no longer suspects, a spokesperson confirmed. The banks and some potential witnesses have also been informed.

The SFO said: “Having thoroughly investigated and having reviewed the information available to it, the SFO has concluded there was insufficient evidence to take the matter further in respect of these individuals and banks.”

The dropped case comes after the SFO was heavily criticised by a judge for an “embarrassing debacle” when one of its paid expert witnesses was found to have failed to disclose the limits of his knowledge.

The SFO investigation of Libor fixing will have run for six years this week. Charges have been brought against 13 individuals, with the four convictions including former UBS trader Tom Hayes and four former Barclays bankers.

However, the watchdog has also faced severe criticism for its failures in another eight cases in which defendants were acquitted or the jury was unable to reach a verdict.

Other rate-rigging cases are still ongoing on the related Euribor case.

Lloyds Banking Group declined to comment.

Read more: Lawyers slam SFO for 'miscarriage of justice' in Tom Hayes case

Full story: Serious Fraud Office ends Lloyds Libor probes: City A.M.

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