(Adds details of allegations, comments, bylines)
By Jonathan Stempel and Aruna Viswanatha
NEW YORK/WASHINGTON, June 10 A former Rabobank
NV trader pleaded guilty on Tuesday for his role in manipulating
Libor, becoming the first person to admit guilt in a worldwide
probe into alleged manipulation of interest rate benchmarks.
Takayuki Yagami, a Japanese national who specialized in yen
derivatives, pleaded guilty to one count of conspiring to commit
wire fraud and bank fraud before U.S. District Judge Jed Rakoff
in Manhattan, the U.S. Department of Justice said.
The government said Yagami admitted to conspiring with three
other former Rabobank traders, who were criminally charged in
January, to submit false, fraudulent Yen Libor submissions to
benefit their own trading positions.
"This was the ultimate inside job," Leslie Caldwell, who
heads the Justice Department's criminal division, said in a
statement. "Traders illegally influenced the very interest rate
on which their trades were based, using fraud to gain an unfair
Rabobank agreed last October to pay $1 billion to resolve
U.S. and European probes into Libor manipulation. This included
a $325 million criminal penalty for the Dutch bank and a
deferred prosecution agreement with the Justice Department.
Libor underpins hundreds of trillions of dollars of
transactions, and is used to set interest rates on credit cards,
student loans and mortgages.
U.S. and European regulators have been probing whether banks
attempted to manipulate the rate to benefit their own trading
positions. Nine people, including Yagami, have been charged by
the Justice Department.
"Manipulating Libor effectively rigs the global financial
system, compromising the fairness of world markets," Attorney
General Eric Holder said in a statement.
Yagami is not scheduled to be sentenced until June 2017, a
delay that could allow time for cooperation with government
probes. His lawyer, Matthew Levine, did not immediately respond
to requests for comment.
The previously charged former Rabobank traders are Paul
Robson, a senior trader in London; Paul Thompson, an Australian
who ran a money market and derivative trading desk in Singapore;
and Tetsuya Motomura, a senior trader and supervisor in Tokyo.
Michael McGovern, a lawyer for Robson; Marc Litt, a lawyer
for Thompson; and Christopher Clark, a lawyer for Motomura, did
not immediately respond to requests for comment.
'NO WORRIES MATE'
Prosecutors said the manipulation involving the Rabobank
traders and others ran from roughly May 2006 to January 2011.
As an example, they cited Robson's alleged Sept. 21, 2007
submission of a one-month Yen Libor rate of 0.90 percent, up
from 0.83 percent the prior day and above the 0.85 percent that
he said "bookies" had predicted, after Yagami had told him he
"would appreciate" a higher submission.
"No worries mate ... there's bigger crooks in the market
than us guys!" Robson allegedly responded.
Rabobank was the fifth financial institution to settle with
regulators worldwide over Libor manipulation. It joined
Britain's Barclays Plc, ICAP Plc and Royal Bank
of Scotland Group Plc, and Switzerland's UBS AG
(Reporting by Aruna Viswanatha in Washington, D.C.; and Joseph
Ax, Nate Raymond and Jonathan Stempel in New York; Editing by
Doina Chiacu and Tom Brown)