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The Justice Department is building criminal cases against a number of banks and their employees,...

  • Sunday, July 15, 2012, 1:50 AM ET
    The Justice Department is building criminal cases against a number of banks and their employees, including Barclays (BCS), for their role in the manipulation of Libor rates, the NYT reports. Authorities expect to make indictments against at least one bank by the end of 2012, although several firms are looking to arrange deals.
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This news story has 29 comments:

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    Tight supply in silver, banks about to crash again...

    http://bit.ly/LSLRB4
    15 Jul 2012, 12:08 PM Reply Like
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    Perhaps the DOJ could take a look at the players over at MFS Global and Peregrine while they're at it?
    15 Jul 2012, 12:40 PM Reply Like
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    Yep, would be about time that at least some criminal prosecutions happen.
    15 Jul 2012, 05:50 PM Reply Like
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    It is downright bizarre that not even a whiff of criminal prosecutions has come out of MF Global, where Corzine & Co. brazenly stole customer funds. And we're supposed to get worked up about Libor? One thing at a time...
    15 Jul 2012, 06:54 PM Reply Like
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    Pretty fast for Libor...where is the John Corzine thingy???
    15 Jul 2012, 12:52 PM Reply Like
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    Just more of the Administration's endless war on banks (and capitalism, generally) and use of every opportunity to conjure up a cheap ploy to grab some cash.

    And, this helps the economy how?
    15 Jul 2012, 12:53 PM Reply Like
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    Capitalism is at its strongest when paired with effective rule of law. No one wants to invest when he isn't sure what the rules are, whether they'll be changed, or whether they'll be enforced. These bankers are not capitalists, they are scum. Real capitalists create value and profit from it; they don't need or want to cheat others.
    15 Jul 2012, 01:58 PM Reply Like
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    Government creates the need for businesses to foment schemes and diversions because of excessive regulation. The irony, as regards banks, is that the Government, itself, was the primary moving force in promoting and enabling the subprime crisis, but, of course, takes no responsibility for same.

    We are also seeing the impact of excessive Government elsewhere, where businesses refuse to invest or hire because Government looms above them with confiscatory mandates, making it much more attractive to be lean and mean and/or to use temporary services, or even operate cash business under the radar of Government altogether.

    Anybody who thinks that the current regime wants to promote fair and honest business is naive in the extreme. This Government wants all business and personal activity under the yoke of oppressive central Government.
    15 Jul 2012, 02:11 PM Reply Like
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    Of course the government isn't promoting fair, honest business. It's crony capitalism with a hefty wad of socialism and confiscation thrown in. Sorry if I gave the impression of supporting it; my point was that the bankers' conduct is equally reprehensible and must be punished extremely severely. "Leave the capitalists alone", often good policy, has no applicability here.
    15 Jul 2012, 04:09 PM Reply Like
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    "Government creates the need for businesses to foment schemes"

    Oh come on. Businesses have been fomenting schemes for as long as there have been businesses. It's called greed and it's simple human nature.
    15 Jul 2012, 05:48 PM Reply Like
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    Someone help me out...
    As I understand it, Barclays under-reported their costs which had the effect of possibly keeping LIBOR lower. In my experience with two companies we borrowed at the 90 day LIBOR rate plus 350 bp. So Barclays in effect helped keep borrowing costs low which saved many, many borrowers money. So who's harmed? Where's the beef?
    15 Jul 2012, 01:53 PM Reply Like
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    People who lent money at LIBOR+350, for the most obvious answer. People who hedged using LIBOR-derived swaps and other derivatives, less obviously. Traders, probably.

    As others have pointed out, the problem for the banks in this case is that they can only lose: any change in LIBOR has offsetting winners and losers, but the losers can sue and the banks cannot sue the winners. That's the sort of problem you create for yourself when you cheat, and I have little sympathy. Hopefully LIBOR derivative counterparties who were not involved in the manipulation will be shielded from litigation, or will be able to recoup their losses from the manipulators. As for the manipulators, they should be hanged in chains in the City of London. They don't deserve to be supported by the state for the rest of their lives in prison, and we could use some good old-fashioned "warnings to others" right about now.
    15 Jul 2012, 02:03 PM Reply Like
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    Sometimes they reported higher. It was a long period of time. And the point is that it was fraud. And it was fraud for their profit. Anytime someone profits, the person on the other side of the trade doesn't. And when fraudulent trades are allowed to happen, people lose confidence in the entire system and stop trading altogether.
    15 Jul 2012, 03:33 PM Reply Like
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    Wise for us to stay away from financial sector for now.
    15 Jul 2012, 02:23 PM Reply Like
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    I so wish they would throw a bunch of people in prison. Fines are good, but we need to make a clear stand that criminal activity will not be tolerated.
    15 Jul 2012, 03:35 PM Reply Like
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    Supposedly JPM is one of the banks. What is that going to do to the share price?
    15 Jul 2012, 06:42 PM Reply Like
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    Its also known as "asking" for contributions, or else.
    15 Jul 2012, 09:21 PM Reply Like
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    The DOJ saber rattling is just a front for shaking down the banks for some contributions. Admin at its finest and in true war mode for its reelection campaign.
    15 Jul 2012, 11:10 PM Reply Like
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    The Libor manipulation is far less insidious than MFGlobal or heck even Countrywide but it will be a cold day in hell before this administration applies basic decency and fairness when deciding who to prosecute. Corzine will be pardoned, everybody knows it. Prosecuting a bundler is a kiss of death for BHO. Hope and change indeed!
    15 Jul 2012, 11:10 PM Reply Like
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    Steal a few billion, pay a fine of a few hundred million and there will be a nice job waiting for those investigating the crime. Again.
    16 Jul 2012, 02:00 AM Reply Like
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    I agree with moneyTalksBSWalks: "The DOJ saber rattling is just a front for shaking down the banks for some contributions. Admin at its finest and in true war mode for its reelection campaign." They have become so predictable.
    16 Jul 2012, 04:35 AM Reply Like
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    Nothing like wrongdoing in London to get the juices flowing in Washington, while we leave it to Spain to go after Bush & Co. It's all useless churn for the masses - or at least those of us who can read.
    16 Jul 2012, 05:36 AM Reply Like
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    For all of you who want this to be ignored, YOU ARE THE PROBLEM. There has to be a case of fraud before the DOJ is going to get involved. And if they have a case, you can believe that they have the evidence. I'm sure they are working on other cases too. Two wrongs don't make a right. They don't put off cases when they have the evidence because of politics. People don't spend their lives in law enforcement for political or monetary gain but because they actually believe that the rule of law means something.
    16 Jul 2012, 09:35 AM Reply Like
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    What is your view on Corzine especially in light of recent evidence that clearly points to his complicity in allowing transfer of customer funds. There has not been the slightest squeak of a case against him and you would have us believe that is due to lack of evidence? So Bloomberg can unearth emails but the people at DOJ cannot? . DOJ and SEC are arms of the US Govt to be used as weapons as needed and yes they do dance to the tune of the current administration be it Repfarts or Libtards.
    16 Jul 2012, 10:46 PM Reply Like
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    BS, the problem is that there's an equal amount of evidence pointing the other way -- namely that the transfers were nonseg funds. The House Finance Committee has been eagerly investigating Corzine with a microscope, hoping to pin something on him and even they haven't yet drummed up anything substantial. You'd have to be seriously deranged to think that Spence Bachus and Ron Paul are "covering" for Obama.
    17 Jul 2012, 09:58 AM Reply Like
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    The House Finance Comm controls squat. There's enough smoke here to warrant an investigation which is totally the DOJ's call, not the House Finance Committee. A Fed primary dealer went underwater in a matter of days and we're supposed to buy the happy story that Corzine lays out? Do you also believe that the Chase guy asking for certification from MF when issuing a margin call was smoking crack? There was blood in the water and enough suspicious behavior to warrant Chase wanting to engage in CYA. Again, I'm not suggesting that wrongdoing absolutely happened, I am stating that there's enough signs pointing to that direction and yet nobody has been charged and there's no investigation from DOJ.
    19 Jul 2012, 02:30 PM Reply Like
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    "there's no investigation from DOJ."

    Untrue. The DOJ not only has been investigating MF Global, they're continuing to do so. I understand people always want to see indictments instantly and will make all sorts of allegations when indictments aren't handed down within a few months but the fact is that few cases are that cut and dried. MF Global certainly isn't -- as the Congressional committee and the federal grand jury are also discovering.

    If you think it's no big deal to be the target of a Congressional investigation, you're simply not thinking clearly. And with Bachus in charge, you can bet these people are out for blood.
    19 Jul 2012, 02:48 PM Reply Like
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    I stand corrected on my statement that there is no DOJ investigation, there certainly is yet to your point, no charges yet. Congressional hearings on these topics are chum for the masses, they really serve no other purpose. The parasites in DC do need to put on a show once in a while and assure the masses that their money is being well spent. The Assistant Treasurer of MF O'Brien made a direct statement that transfers of customer money were done on Corzine's instructions(I believe she was unwilling to follow that up under sworn testimony and that may be a stumbling block) so unless she is explicitly lying transfer of customer money was done. This is not the only sign of malfeasance on Corzine's part and I seriously doubt that an Assistant Treasurer has much to gain by authorizing on her own transfers of customer money. Does Corzine have a lot to gain -- hell yes. Crooks on Wall St and elsewhere have gotten bolder over the past couple of decades in committing these crimes because the calculation really is quite simple -- loot a lot, pay a paltry 2-5% of your loot, keep the rest and you will not spend a day behind bars. Rinse and repeat. After the 80's S & L scandal, hundreds of bank execs spent time behind bars, this decade with all the shennanigans that have happened, probably fewers than 20 execs have spent time behind bars. Martha was jailed for a crime that was < 50K and yet Angelo Mozilla, Dave Sambol, Jack Schakett etc all walked away free. Corzine will in all likelihood too.
    19 Jul 2012, 04:31 PM Reply Like
  •  
    Light punishment for white collar crime has certainly been a problem for a long time! It's somewhat gratifying to know that Skilling was denied parole and that Madoff is rotting away for the rest of his life but I agree these are the exceptions not the rule.
    20 Jul 2012, 08:37 AM Reply Like
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