UPDATE 1-UK's FCA warns two more people over rate submissions

Mon Mar 3, 2014 10:08am EST

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LONDON, March 3 (Reuters) - Britain's financial regulator said on Monday it had issued warning notices to two more people for "significant failings" in relation to an interbank interest rate benchmark.

The Financial Conduct Authority (FCA) did not name the individuals.

The Authority said one was a trader at a bank who tried to interfere with the bank's rate submissions by making requests to its submitters with the intention of benefitting trading positions.

The other, whose position was not disclosed, took into account requests made by traders to benefit their positions when determining the submission made to a benchmark, the FCA said.

The warnings, issued in January but published on Monday, are related to Libor, or London interbank offered rate, and its continental European counterpart Euribor.

The rates, compiled by banks submitting quotes of rates they believe they could borrow money at from another bank, have been the subject of sprawling investigations stretching from North America to Asia.

Banks have been found to have rigged them to show that either they were not in financial difficulty during the credit crisis or to improve their own trading positions.

So far a number of banks have been fined $6 billion for manipulating the rates, which are used to price around $400 trillion worth of products worldwide, from derivatives to home loans.

The FCA has now issued five warning notices since it gained the power to do so. A notice sets out the regulator's case against the individual and the breadth of any potential financial penalties they face.

Lawyers say the regulator has dozens more individuals in scope.

Those subject to warnings are able to contest allegations in the notice and can take the matter to the independent Upper Tribunal for resolution, if necessary.

Individuals are expected to fight harder than some of their employers against any settlement with the regulator, because they risk not only losing their jobs, but also the possibility of paying hefty fines.

The FCA last week published a warning to a trader at a bank for failings over two years.

Earlier in February it published warnings to a submitter of benchmark interest rates and a manager at a bank.

Three former Barclays traders charged with Libor rigging over two years are scheduled to appear at a London court on Tuesday for a preliminary hearing. (Reporting by Clare Hutchison; Editing by Mike Collett-White)

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