Barclays Plc was fined 290 million pounds ($453.2 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. 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,” Britain’s Financial Services Authority said.
Barclays traders in New York, London and Tokyo attempted to manipulate rates to benefit their trading positions in swaps and futures that were tied to the rates, according to the CFTC. Traders at Barclays made the requests regularly and sometimes daily from mid-2005 through 2007 and sometimes later until 2009, the agency said in a statement.
Libor is derived from a survey of banks conducted each day on behalf of the British Bankers’ Association in London. Lenders are asked how much it would cost them to borrow from each other for 15 different periods, from overnight to one year, in currencies including dollars, euros, yen and Swiss francs. After a set number of quotes are excluded, those remaining are averaged and published for each currency by the BBA before noon.