The City watchdog has fined and banned a former Royal Bank of Scotland (RBS) interest rate derivatives trader, Neil Danziger.
The Financial Conduct Authority (FCA) levied Danziger with a £250,000 penalty and a ban for life from any regulated financial activity.
The former trader was accused of attempting to manipulate the Libor rate for Japanese yen, and entering into "wash trades" through which he paid two brokerage firms "in recognition of his receipt of personal hospitality".
“Proper standards of market conduct reflect the interests of the whole community in the well-being of our financial markets. Mr Danziger’s reckless disregard of these standards has no place in the financial services industry," said the FCA's Mark Steward.
Danziger refutes the FCA's findings, but will not be taking his case with the watchdog any further.
“Mr Danziger continues to dispute the FCA’s findings and feels strongly that he is being scapegoated for the systemic problems relating to Libor," said his lawyer Ben Rose, of Hickman & Rose.
However, the last five years have been incredibly challenging. He is emotionally exhausted and financially drained. He leaves it to others, better resourced, to press the FCA for answers, hopeful that, one day, the real truth will come out.
The finer details
The FCA said it had banned Danziger as he "is not a fit and proper person because he acted recklessly and lacks integrity".
While working at RBS, he traded products referenced to Japanese yen Libor. On occasion, he would make RBS's Libor submissions to the British Banking Association when the primary submitters were not available.
According to the FCA, between February 2007 and November 2010 Danziger routinely made requests to the primary submitters intending to benefit his and other traders' positions, took his trading positions into account when he acted as a submitter, and on two occasions obtained a broker’s assistance to attempt to manipulate the Japanese yen Libor submissions of other banks.
Added to that, the watchdog said Danziger entered into 28 wash trades between September 2008 and August 2009. These were risk-free trades with the same party, in pairs that cancelled each other out, for which "there was no legitimate commercial rationale". These trades were purely to facilitate payment to brokers.