Update on LIBOR cases

Has been rather quiet lately on the Libor front, other than six traders have been acquitted after a mere one day of jury deliberations. A few updates:

2/12 – The Wall Street Journal – Last Wave on LIBOR: CFTC Likely to Charge Multiple Banks for Rate Rigging – Article cites sources saying the CFTC and British Financial Conduct Authority will be likely bringing civil charges in the next few months against Citigroup and HSBC. FCA has dropped an investigation of J.P. Morgan Chase but CFTC still has that investigation open.

Article says penalties against banks for manipulating LIBOR are in the range of $6B.  My spreadsheet shows actual settlements against eight banks and one brokerage firm total $9.05B. I had been guessing there would be another billion of private settlements, but recently have seen some comments those cases aren’t going very well. I will make a guess of another three-quarters of a billion for the pending cases from CTFC and FCA. My guess is the total settlement when all cases are resolved will be something between $10B and $11B.

That is a lot of wasted stockholder equity.

12/21/15 – New York Times – Court Reduces Ex-Trader’s Sentence in Libor Case – Back in August, the British Serious Fraud Office gained a conviction in the first trial of a banker who was manipulating Libor. An appeals court has upheld the conviction of Mr. Tom Hayes, previously of UBS, Citigroup, and RBS. The court reduced his sentence from 14 year to 11 years.

For reasons I cannot understand, Mr Hayes provided 82 hours of voluntary testimony to the SFO. After five months of cooperation, he decided to fight the expected charges.

As mentioned in the first link above, 6 of his alleged co-conspirators were acquitted after a mere one day of deliberations by the jury. Must have not been a very strong case.

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