The U.S. Justice Department’s investigation into interest-rate manipulation at global banks is piercing the executive suite, with prosecutors scrutinizing the activities of senior Societe Generale officials, according to people familiar with the matter.
Bloomberg News reports that the government has collected documents suggesting Societe Generale executives were aware that bankers there were submitting fake U.S. dollar Libor rates, the people said. Such misleading numbers, which made bank borrowing costs look lower than they actually were, have been the focus of years of U.S. and European investigations, charges against more than a dozen bankers and brokers, and more than $2 billion in U.S. criminal penalties. Yet such allegations have rarely touched global banks’ upper reaches.
Clues about the government’s Societe Generale probe can be found in an indictment filed in August against two lower-level employees of the bank. One of the bank employees warned about problematic rate submissions in an email to executives, at least one of whom replied, according to the court documents, which didn’t identify the executives.
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