LONDON Feb 27 Britain's financial regulator has
issued its third warning notice to an individual trader for
"significant failings" over nearly two years, as part of an
investigation into manipulation of benchmark interest rates.
The Financial Conduct Authority (FCA), which has already
sent two warning notices to other traders, said the unidentified
trader made Libor rate submissions that took into account the
person's own trading book positions, tried to influence other
bank rate submissions and colluded with a trader at another bank
to submit quotes at his request.
The warning, issued in January but published on Thursday,
related to allegations that traders rigged the London Interbank
Offered Rate (Libor), a benchmark in the global financial system
used to help price about $450 trillion of financial products
from student loans to complex derivatives.
The individual will now be 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 regulator has dozens of individuals in scope, lawyers
say, and is keen to issue prompt warning notices to ensure cases
are brought within a legal three-year window from when it became
aware of misconduct.
The sprawling Libor investigation, which stretches from
North America to Asia and has shaken public faith in the
financial industry, has so far led to fines of $6 billion
imposed on 10 banks and brokerages and charges against 13
Rates such as Libor are based on a survey of what banks
would charge each other for loans. But 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
Earlier this month, the FCA published a warning to a
submitter of benchmark interest rates for failings over more
than two years and another to a manager at a bank for failings
over more than three years.