U.S. Markets

UK watchdog fines ex-Deutsche Bank trader over Libor

LONDON (Reuters) - Britain's Financial Conduct Authority has fined ex-Deutsche Bank DBKGn.DE trader Guillaume Adolph 180,000 pounds ($249,000) for "improperly influencing" quotes used for the Libor interest rate benchmark and banned him from working in finance

FILE PHOTO - The logo of the new Financial Conduct Authority (FCA) is seen at the agency's headquarters in the Canary Wharf business district of London April 1, 2013. REUTERS/Chris Helgren

Banks have been fined billions of dollars for trying to rig the London Interbank Offered Rate, or Libor, which is denominated in several currencies and used to price trillions of dollars in financial products from home loans to credit cards.

“Mr Adolph improperly influenced several of Deutsche’s Libor submissions in disregard of standards governing Libor submissions,” Mark Steward, the FCA’s director of enforcement, said in a statement on Monday.

“Mr Adolph’s misconduct threatened the integrity of important benchmarks. He should have no further role in the financial services industry.”

Other traders have been fined and banned for their role in the Libor rigging scandal, and former UBS UBSG.S and Citigroup C.N trader Tom Hayes was sent to prison.

Adolph’s lawyer, BCL Solicitors, said the events occurred nearly a decade ago and that Adolph wishes to move on with this life outside financial services.

“Thus, while he does not admit the FCA’s findings, Mr Adolph has waived his right to contest that he was concerned in a breach of an FCA principle by Deutsche Bank, his former employer,” BCL Solicitors said in a statement.

“The FCA does not conclude or even suggest that he was dishonest. As the FCA has previously found, the blame for the problems associated with Libor within Deutsche Bank lies firmly at the door of the bank,” BCL said.

Deutsche Bank, fined $2.5 billion by British and U.S. authorities in 2015 for alleged rigging of Libor, declined to comment.

The FCA said it found that between July 2008 and March 2010 Adolph made requests to Deutsche Swiss franc Libor submitters to adjust their quotes to benefit his own trading positions.

One internal message from Adolph to one of Deutsche Bank’s Swiss franc Libor submitters read “Your fixings low please”.

He also took his own trading positions into account when acting as Deutsche’s primary yen Libor submitter, the FCA alleged.

Adolph improperly agreed with a trader at another Libor submitting bank to make yen Libor submissions which took into account that trader’s requests, the FCA said.

“The FCA has found that Mr Adolph closed his mind to the risk that these actions were improper. He was also knowingly concerned in Deutsche’s failure to observe proper standards of market conduct,” the watchdog said.

The FCA issued Adolph with a notice in January 2014 for the actions it was taking, but proceedings were put on hold because of an ongoing criminal investigation by the Serious Fraud Office into certain individuals who formerly worked at Deutsche Bank.

The Bank of England and its counterparts in Japan, the United States and Switzerland have told markets to switch from Libor to alternative rates being put in place by central banks.

Reporting by Huw Jones; Editing by Jason Neely, Alexander Smith and David Goodman