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Trader jailed for 14 years over Libor rate-rigging

Andalublue

Andalublue

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At last! Someone receives justice for serious fraudulent behaviour in the banking industry. This guy received 14 years! That's a real punishment. Of course, it's only a junior trader, but what did you expect? Let's hope that more convictions follow, although the likelihood of the people who failed to control their staff, benefitted from the fraud, and now are rushing to distance themselves from their own staff, will not be doing hard yakka.

Trader jailed for 14 years over Libor rate-rigging - BBC News

Does anyone know just how many bankers have faced gaol over their fraudulent behaviour in recent years?
 
Andalublue said:
At last! Someone receives justice for serious fraudulent behaviour in the banking industry. This guy received 14 years! That's a real punishment. Of course, it's only a junior trader, but what did you expect? Let's hope that more convictions follow, although the likelihood of the people who failed to control their staff, benefitted from the fraud, and now are rushing to distance themselves from their own staff, will not be doing hard yakka.

Trader jailed for 14 years over Libor rate-rigging - BBC News

Does anyone know just how many bankers have faced gaol over their fraudulent behaviour in recent years?
Click to expand...
ridiculous. Decades of corruption. Hundreds of billions of dollars worth in fraud. One jr. Trader convicted? Obvious Scapegoat is obvious.
 
Andalublue said:
At last! Someone receives justice for serious fraudulent behaviour in the banking industry. This guy received 14 years! That's a real punishment. Of course, it's only a junior trader, but what did you expect? Let's hope that more convictions follow, although the likelihood of the people who failed to control their staff, benefitted from the fraud, and now are rushing to distance themselves from their own staff, will not be doing hard yakka.

Trader jailed for 14 years over Libor rate-rigging - BBC News

Does anyone know just how many bankers have faced gaol over their fraudulent behaviour in recent years?
Click to expand...

If it makes you feel better, there have been dozens of traders and managers all the way up to the top jailed since the 1980s in the USA and England. It is, I will grant you that, relatively infrequent in the continental EU, But even there there have been a couple jailed since 2008.
 
reinoe said:
ridiculous. Decades of corruption. Hundreds of billions of dollars worth in fraud. One jr. Trader convicted? Obvious Scapegoat is obvious.
Click to expand...

There have been lots of convictions in the US. Maybe there should be more, but the the American judicial system has been relatively good.
 
I can't recall anyone but him, so far. Nobody else.
 
I say, don't lock them up.

No, instead sentence them to living on minimum wage for the next twenty years. That should teach them a few things.
 
Andalublue said:
I'm not very well-versed on this, but I don't believe the Glass-Steagall provisions ever applied to UK-based banking activities, and according to many, the Libor fraud could happen again.

Libor-style scandals could happen again as banks are failing to reform, says FCA - Telegraph
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Oh no, it doesn't. The Glass-Steagall was an American law. I'm only bringing up the idea, because I think it needs to be looked at more.

http://www.out-law.com/en/articles/...n-lending-and-trading-activities-say-reports/
 
if i walk down to my local bank and hold the place up for five hundred bucks, i'd probably get twenty years. if i collapse the global economy to make millions, no problem. i'm honestly stunned that even a junior trader was punished in any way.
 
Andalublue said:
Really? Do you have links to reports of bankers and traders receiving custodial sentences? Prosecutions for Libor fraud have been noticeably thin on the ground.

The US Justice Department's Libor prosecution of RBS is too little, too late | Heidi Moore | Business | The Guardian
Click to expand...



https://en.wikipedia.org/wiki/Michael_Milken
https://en.wikipedia.org/wiki/Ivan_Boesky
https://en.wikipedia.org/wiki/Bernard_Madoff
UBS rogue trader Kweku Adoboli jailed for seven years - Telegraph
http://www.theguardian.com/business/2014/sep/08/matthew-martoma-sac-capital-jail-insider-trading
http://www.nytimes.com/2014/05/04/magazine/only
http://www.bloomberg.com/news/artic...ing-one-top-banker-jail-financial-crisis.html
ETCETCETC

That is only a few of the newer or better known bankers or traders from the past to get jail. But you could go on for ever. There have been convictions over and again since the 1980s.

As to the Libor fraud, there is good reason for the lack of prosecution of traders and bankers. The central banks, other regulators and finance ministries knew of the collusion and were quite happy it was going on. You see, the rates were much lower, than they could possibly have been at times. This gave the impression of more stability in the banking sector than was really there. I had a lengthy discussion with a friend at the Bundesbank about it at the time. That was fraud certainly. The public was being mercilessly deceived and could have lost hugely. But the deception was known to governments and you will not see those people go down.
 
joG said:
https://en.wikipedia.org/wiki/Michael_Milken
https://en.wikipedia.org/wiki/Ivan_Boesky
https://en.wikipedia.org/wiki/Bernard_Madoff
UBS rogue trader Kweku Adoboli jailed for seven years - Telegraph
Ex-SAC trader Mathew Martoma given nine years in jail for insider trading | Business | The Guardian
http://www.nytimes.com/2014/05/04/magazine/only
http://www.bloomberg.com/news/artic...ing-one-top-banker-jail-financial-crisis.html
ETCETCETC

That is only a few of the newer or better known bankers or traders from the past to get jail. But you could go on for ever. There have been convictions over and again since the 1980s.

As to the Libor fraud, there is good reason for the lack of prosecution of traders and bankers. The central banks, other regulators and finance ministries knew of the collusion and were quite happy it was going on. You see, the rates were much lower, than they could possibly have been at times. This gave the impression of more stability in the banking sector than was really there. I had a lengthy discussion with a friend at the Bundesbank about it at the time. That was fraud certainly. The public was being mercilessly deceived and could have lost hugely. But the deception was known to governments and you will not see those people go down.
Click to expand...
I think the public DID lose hugely, didn't they? I think municipalities lost around $10 billion in the US alone. This wasn't any kind of victimless crime, in fact it probably had more victims than almost any other crime in history. The fact that such a massive fraud has so far resulted in one custodial sentence is a scandal of unprecedented proportions.
 
Andalublue said:
I think the public DID lose hugely, didn't they? I think municipalities lost around $10 billion in the US alone. This wasn't any kind of victimless crime, in fact it probably had more victims than almost any other crime in history. The fact that such a massive fraud has so far resulted in one custodial sentence is a scandal of unprecedented proportions.
Click to expand...

I do not think I said that people and organizations did not lose. A huge amount was lost.

There were also a lot of people that "won" or "lost less" because of the government and central banks allowing the banks to show higher refinancing and so suggest a stronger market than existed. Now this is not meant to justify fraud. But on the swap transactions there were companies on both sides of the fixing. Earnings and loss are symmetric, if not in the individual deal then more or less in the sum over all deals. That helped dam the crash and its results like falling production and job numbers. This does not mean that the bank traders did not make money by cheating. But, where the public supervisory and governments knew about it and let them do it, the persons in the banks are hardly the ones to concentrate ones wrath on here.

But your original statement was more general and seemed to aim at bankers and traders in treatment in the US. It was that that disturbed me, because my experience is that the legal treatment in the US or by US judiciaries is much more transparent and dependable than in any other country I have worked in. This is not to say that it is good enough. There are a number of measures I would very much want to see implemented. But do not kid yourself. The USA has been a leader in governance over the last decades and still is, if you are savvy and honest about it.
 
Andalublue said:
At last! Someone receives justice for serious fraudulent behaviour in the banking industry. This guy received 14 years! That's a real punishment. Of course, it's only a junior trader, but what did you expect? Let's hope that more convictions follow, although the likelihood of the people who failed to control their staff, benefitted from the fraud, and now are rushing to distance themselves from their own staff, will not be doing hard yakka.

Trader jailed for 14 years over Libor rate-rigging - BBC News

Does anyone know just how many bankers have faced gaol over their fraudulent behaviour in recent years?
Click to expand...

Yes.. 1 .. this guy.
 
joG said:
There have been lots of convictions in the US. Maybe there should be more, but the the American judicial system has been relatively good.
Click to expand...

LOL yea right.. what convictions? Where are the guys from J.P Morgan, Bank of America and so on that have gone to jail? No where.
 
PeteEU said:
LOL yea right.. what convictions? Where are the guys from J.P Morgan, Bank of America and so on that have gone to jail? No where.
Click to expand...

I realize that that is a popular view, but have known and do remember people at JP, Citi or BoA that went to jail. It does not happen often and often then, it is not markets people that did get prosecuted. Also it should be noted, that it is sometimes the institution that goes down as well as the bad guy. If you mean in the case of the fixings, I pointed out some reasons that it will be difficult to prosecute. If you recall this was visible, if one understood how these things work, when Barclays was under scrutiny. The evidence pointed to the supervisors and government having been informed. The other thing is and there will be some convictions, as the traders had probably not talked with the central banks and finance ministries like their bosses had, it is relatively early times. If you have ever been close to a case of this type you will know how long and involved the dance is, before anyone wants to throw the book. Even in the US this takes time. ;)
 
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