By Greg Farrell and Lindsay Fortado
July 27, 2012
The U.S. Justice Department is preparing to file charges this fall against traders from several banks in the global probe of interest rate-rigging. Meanwhile, U.K. prosecutors haven’t even decided whether they have a case.
The U.K. Serious Fraud Office opened a criminal investigation this month after Barclays Plc (BARC) was fined a record 290 million pounds ($450 million) by U.K. and U.S. authorities. Politicians including U.K. Chancellor of the Exchequer George Osborne and Ed Miliband, leader of the opposition Labour Party, called for a criminal probe, and the agency was told it would be given a budget to take on the case.
The SFO had declined to get involved in the investigation for more than a year, despite briefings with the U.K. Financial Services Authority and a compilation of findings from U.S. enforcement agents. The U.S. evidence was provided as early as late last year, according to a person familiar with the case who wasn’t authorized to discuss it.
“It’s partly the difference in culture,” said Andrew Haynes, a law professor at the University of Wolverhampton in England. “In America, economic crime is something that’s regarded as desperately serious. In this country it is regarded as a problem, but there’s sometimes a slothful response.”
The U.K. joins the U.S. in criminally investigating how derivatives traders and rate submitters colluded to rig the London Interbank Offered Rate, or Libor, and other interest rates. At least a dozen banks are being probed by regulators worldwide.
Royal Bank of Scotland Group Plc, UBS AG (UBSN), Deutsche Bank AG (DBK) and Credit Suisse Group AG (CSGN) are among banks awaiting their fate as regulators from Tokyo to London to New York investigate.