Jun. 27, 2012 (Bloomberg) -- Barclays Plc (BARC) was fined 290 million pounds ($451.4 million), the largest penalties ever imposed by regulators in the U.S. and U.K., after admitting it submitted false London and euro interbank offered rates.
Chief Executive Officer Robert Diamond and three lieutenants will forgo their bonuses as a result, Britain’s second-biggest bank by assets said in a statement today. “A member of senior management” instructed Barclays’ Libor staff to lower their submissions to make them match other banks and dispel concern about the lender’s health, the U.S. Commodity Futures Trading Commission said.
Derivatives traders requested the false submissions in the Libor and Euribor setting process, as they were “motivated by profit and sought to benefit Barclays’ trading positions,” the U.K. Financial Services Authority said. The settlements with the FSA, the CFTC and the U.S. Department of Justice are the first in an international investigation into whether banks tried to manipulate Libor, the benchmark rate for $360 trillion of securities, to hide their true cost of borrowing.
“Others will follow suit,” said Tom Kirchmaier, a fellow in the financial-markets group at the London School of Economics. “That the company settled and the top leadership team forgoes their bonuses sets the right tone.”
Citigroup Inc., Royal Bank of Scotland Group Plc, UBS AG, ICAP Plc, Lloyds Banking Group Plc (LLOY) and Deutsche Bank AG are among firms that are being probed by regulators worldwide into how Libor is set.