Does Libor Manipulation Deserve The Death Penalty?

Tyler Durden's picture

Bloomberg's William Cohan released a provocative piece last night, headlined by the even more provocative "UBS Libor Manipulation Deserves the Death Penalty." We can only assume that Cohan is being metaphorical - after all, despite the rare occasional recent criminal charge no one has still gone to prison for the biggest coordinated manipulation of a benchmark fixed income market for years: something previously relegated to the fringes of crackpot conspiracy theories - after all, so many people were in on it, how can they possibly all keep their mouths shut - you know, the usual excuse against massive conspiracy theories, at least until they become conspiracy fact. Yet one wonders: will current and future ongoing market manipulations ever cease when there is no real deterrent: after all spending a few years in jail is certainly worth a few million in ill-gotten proceeds, even assuming the termination of a career in finance. Is Cohan being rhetorical? Or has the time for some true vigilante justice finally come? Because in a world increasingly best portrayed by the 2009 movie "The International" where one has to "go outside" a captured legal system to get real justice, is vigilantism eventually coming to every town near you, once the money illusion ends? And a bigger question - is this the main preemptive reason for the gun control push seen so vividly in recent days and months?

Via Bloomberg:

There is no point in mincing words: UBS AG (UBSN), the Swiss global bank, has been disgracing the banking profession for years and needs to be shut down.


... On Dec. 19, the bank paid $1.5 billion to global regulators -- including $700 million paid to the CFTC, the largest fine in the agency’s history -- to settle claims that for six years, the company’s traders and managers, specifically at its Japanese securities subsidiary, manipulated the London interbank offered rate and other borrowing standards.




The same day of UBS’s global settlement, which included the Japanese subsidiary pleading guilty to fraud, two former UBS traders, Tom Hayes and Roger Darin, were sued by the Justice Department and charged with “conspiring to manipulate” Libor.


Benchmark Manipulation


... “They defrauded the company’s counterparties of millions of dollars. And they did so primarily to reap increased profits, and secure bigger bonuses, for themselves.”


To see the level to which UBS employees descended, one need look no further than their written communications, as per U.S. prosecutors’ document dump. “Mate yur getting bloody good at this libor game,” one broker told a UBS derivatives trader. “Think of me when yur on yur yacht in monaco wont yu.”


But, then again, UBS and bad behavior have become nearly synonymous. During the financial crisis, UBS took writedowns totaling some $50 billion, prompting the company to produce a 76-page, single-spaced, Orwellian transparency report. ...


In February 2009, UBS entered into a deferred-prosecution agreement with the Justice Department and admitted to helping American taxpayers defraud the Internal Revenue Service. UBS agreed to provide the names of some clients whom it had helped to avoid U.S. taxes and to pay a fine of $780 million.


Then, last month, came the conviction of former UBS “rogue” trader, Kweku Adoboli, on charges that he hid trading losses totaling more than $2.3 billion. The U.K.’s Financial Services Authority fined UBS some $47 million and charged that its oversight of London traders was too trusting. The bank seems more than a little out of control.




‘Wash Trades’


It found that unidentified UBS traders entered into “wash trades” -- described as “risk-free trades that canceled each other out” and had no commercial rationale -- in order to “facilitate corrupt brokerage payments” to three individual brokers at two other firms.


In a Sept. 18, 2008, telephone conversation, Hayes promised that if one broker kept the six-month Japanese yen Libor unchanged for the day, he would in exchange “pay you, you know, 50,000 dollars, 100,000 dollars ... whatever you want ... I’m a man of my word.” Lovely.




Hayes repeated his request for a “low” submission on the three-month Japanese yen Libor. Darin messaged back: “as i said before - i dun mind helping on your fixings, but i’m not setting libor 7 [basis points] away from the truth i’ll get ubs banned if i do that, no interest in that.” Darin eventually submitted a Libor rate two basis points less than the “unbiased” figure of 0.69 percent.


In levying the record $700 million fine, David Meister, the CFTC’s director of enforcement, said that “when a major bank brazenly games some of the world’s most important financial benchmarks, the CFTC will respond with the full force of its authority.” That’s good as far as it goes, and the CFTC is to be commended for rooting out the global Libor manipulation scandal.


But an even more emphatic message needs to be sent to UBS by its prudential regulator in the U.S.: You are finished in this country. We are padlocking your Stamford, Connecticut, and Manhattan offices. You need to pack up and leave. Now.

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nugjuice's picture

The better question is what other banks also deserve this? If you think UBS is the only bank engaging in this kind of activity I have a $100mm derivative I can sell you that can't lose. It's net zero exposure with a guaranteed 10% return. Just send me a check.

Zer0head's picture

at the risk of repeating


They threw this old guy into jail for a year and a half just last week.

His crime

In the middle of fucking nowhere in the Mojave Desert of California, on land that he owned, he built himself a house out of old telephone poles.  His crime.. didn't get a building permit so now he's in jail.,0,59281...


meanwhile a fifty three year old respectable member of California Highway Parol (CHP) just retired with a lump sum half million dollar payout and an annual pension of just under $200,000 per year

IamtheREALmario's picture

As far as I can tell, governments always become drunk with power and get corrupt (governments are characterized by the people who make up the governments ... and so some easy assumptions can be made about the people and their nature). That is the way it has always been throughout history. A good question would be: "Why?"

As for this instance, my guess is that the governmental people in question made some deal with some cohorts to make sure the prison system is full so that they can share in the wealth they parasitically live off. This is the most rational of explanations, IMO.

Governments have always survived by dividing the people and hiring some and then overpaying them to work against what is perceived for humanity ... hence the CHP dude and most likely many other compromised minions who are parasites on society. The question is then: "Do we need these parasites to help us move along in our development or are they slowing us down?"

urwright's picture

better question might be if folks even want to evolve

and if they do not want to does it give them the right to choose what kind of devolvolution they get to participate in?


Stackers's picture

We should do worse to a banker than kill them.

We should take all their money.

Like in the good old days when principals and officers of financial institutions were personally liabel in company bankruptcies.

End the bailouts and make em put some financial skin in the game

Problem solved.

Tortuga's picture

Hey, this is America, Land of Opportunity, do both.

Urban Redneck's picture

The US is also the land of USELESS EATERS voting themselves more free iCrap (the symbiotic beneficiary of LIbor-rigging bankster greed).

Care to also install gas chambers for those who fall off the 99-week cliff?

Freddie's picture

Anyone who testifies for LieBor scandal will have their kid drugged and turned into a mass murderer.  So they can murder more innocents to get guns banned.

F TV and F Hollywood are backing it.

Banksters's picture

This country is fucked.   

urwright's picture

typical article here.

describe a serious problem in all seriousness.

and come up with a T.I.N.A. solution.

why the fuk is no one talking about interest rates in anything any government does as illegal and making it illegal for any government to borrow?

stolkholmsyndrome if you ask me as everyone here is a gitdamnedmutherfukinnaggerslave to their $

get what you deserve and never like it? look in the mirror and say "i am a nagger"

feel better?

IamtheREALmario's picture

People here understand that money is the newest version of slavery. It works better than a whip when people "think" they are free or that they can earn their freedom, if only they had some more money.

People may not be smart enough or developed enough yet to "understand" ... and mass slaughtering intellectuals every purge does not help.

urwright's picture

when i, the dogs, or the drunk pukes - it is a good thing

when old growth burns violently to the ground and blackens a forest - years later it is strongest as seeds there back then were on most fertile soil

purge and burn - good things in nature

just would you seed the results with a GMO seed created with viruses to "protect" it from certain aspects of mother nature?

that is what you naggers and your naggers before you have ever done - protect yourself from that which gives you everything

fuk everyone of US as that is all we will do to all else until there is the ability to see FAIL for what it is

it is the ultimate success in finding what does not work - all Tyler and most here do is nag for a different GMO seed that will shift the problems instead of just allowi g problems

viahj's picture

talk is cheap, so are matches

Tortuga's picture

Based on previous revelations, it's all of the TBTF banks and the FED.

A Nanny Moose's picture

This is essentially the manipulation of the price of money, yes? Why isn't Shouldn't central banks be charged as well?

JustObserving's picture

Does Libor Manipulation Deserve The Death Penalty?

Along with gold and silver price manipulation.  

toady's picture

We were just debating crime & punishment yesterday. I'm evolving around to an eye for an eye, since this arbitrary death penalty stuff isn't working.

Sandusky & pedifiles? Strap them into that 'burn before reading' fucking machine and let it run till they are dead. These mass shooters? Shoot off their fingers, toes, wrists, ankles, etc. Have doctors keep them alive as long as possible.

Bankers? I don't know... death by 1000 paper cuts?

It's looking like that is the only way to deter these criminals

Radical Marijuana's picture

THe original gold and silver standard money, both in ancient Greece, and in earliest America, had the death penalty as the punishment for corrupting that money.

Shigure's picture

During Sir Isaac Newton's time as warden of the Royal Mint, counterfeiting the currency was high treason.  Offenders were hanged, drawn and quartered.

Under the heading "Counterfeiters"

HowardBeale's picture

If I had nothing left to lose and I weren't afraid to go to jail I would be one of those vigilantes; and I'm relatively sane (as near as I can tell from my normal life among friends and family) other than my wish for a sudden wave of dead Wall Street Bankers to wash away every other headline on every publication with the joyous, shouting-out-with-glee- notification that bankers are, indeed, dead. I can't see any way that with all the people who have nothing left to lose, the number of "insane" people out there, the fact that most vigilantes would be justified--and heroes! in the eyes of a few billion people around the planet--yes, I can't see one single way that it doesn't happen. Matter of time before the headline reads: "99 Wall Street CEOs Slaughtered at Private Confrence."

ball-and-chain's picture

Nothing deserves the death penalty.

What we need to do is just follow the laws that are on the books.

We don't need another French Revolution.

a growing concern's picture

At least they haven't outlawed rope and lamp posts. Yet.

CPL's picture

No clue why you were junked.


Historically it's the technology of choice for the mob.  The french got all fancy with the guillotine, but the process was the same.


Round up every man, woman and child tied to the family name.  Then it's a short drop with a quick stop, usually in a public forum to allow witnesses.  Head on a pike is the decoration after the fact.

Ignatius's picture

"The French got all fancy with the guillotine..."

I have a theory that this is one of the reasons why there's an ongoing meme against the French  as 'cheese eating', 'surrender monkeys', etc..  The elites are fully aware that the French people rose up en mass and killed the elites (bankers, aristocrats, et al) during the 'Reign of Terror'.  The French were there with their navy for the US when we were declaring our independence from the Brits.

Of course, the other part of the theory is that the French can be insufferably rude and self-righteous snobs but, hey, no one's perfect, right?

The US has been taken control of by the Wall Street crime syndicate among others.  See HSBC money laundering settlement for the details.

CPL's picture

The french are pretty easy going.  

Entire culture built on fine wine, cheese, fantastic breads, afternoon naps and having extra-martial's to have a bit of fun on the side.  

Now ask yourself, what it took to piss off an entire population of typically relaxed people to construct a tool to twist the passing for all the elite and the bankers class (they were bricked as well along with high courts and high rank military that were replaced).  It was a doctor, a man of healing that invented it.


That's how angry people were.  A man of medicine (although the term medicine is more of a abstract in the 1700's).  It took a pissed off doctor that lost everything, his family to starvation, his family home, the land he grew his food taken for some frivolous nonsense.  Somehow the good doctor could not bring himself to say "C'est la vie" once more and invented a perfect machine to kill.


The blade removes the head so fast that the nervous system doesn't shut down the head.  So for three minutes every head on the basket got to hear, see and taste the final minutes of their lives.  Men, women and children.  Some people took pity on the children and would brain them with a blacksmith's hammer to save them the terror of it.

That's how pissed the good doctor Joseph Gullotine was.  He built a machine and wanted them to feel and see everything before their brains died from a lack of oxygen.  He built three minutes of terror, then eight minutes of insanity while the brain starved for oxygen starts misfiring synapses.  All the meanwhile being aware of what's happening because the lack of signals from the body to shut down the brain to avoid just that.


Personally I don't think we should have statues of founding members of any sovereign nation surrounding a government building.  A guilotine should be erectd in front of every court house, parliment, congress, places of political decision making just to remind those given the power what happens when they fuck up badly.  It puts things in perspective for those that wish to rule that trust is a very thin thread and broken easily one the line is crossed.

Ignatius's picture

Thanks for the History lesson.

Horrifying, but I up-voted nonetheless.



CPL's picture

lol, thanks bud.



Tortuga's picture

Wow. That sounds like it would be, justifiable, after all the misery caused by the banksters, lawyers and their ho politicians. It would give them time to reflect on their Cayman Islands hidden funds that they will not be spending or inheriting.

spinone's picture

Unfortunately, there would be insufficient blood pressure to preserve consciousness in a decapitated head, just like fainting. More likely, the impact of the blade on the spine would cause unconsciousness on its own.
Any expressions or eye movements mistaken for consiousness were involuntary twitches.

CPL's picture

One of the many clerks of the revolution, which were also clergy attempting to obtain last confessions; noted that most of the heads were conscious, eyes moving, focusing and reacting to movement and light stimulation, ears wiggling.  Some would attempt to speak, but with no vocal cords or air the french invented a term.  


Gaping.  Jaw moves, nothing comes out.  One women was to have said to be screaming before during and after because the weight came down wrong and only cut most of her neck off.  The head collectors though knew when the head was dead though. Qui Louche.  Or french for cockeyed.  


Of course the crime of being spoiled royalty was nothing to what was done to bankers that enabled the country to ruin and the introduction of Napoleon.  The bankers were skewered with a white hot poker and trotted around in parades when they caught one.  Their wives, children, cousins, anyone that profited by their family banking name, got the pear which is slightly more menacing than it sounds.  The military commanders were spindled (guts pulled to length) then tied to horses along with rope and quartered.  The quartered bodies would be buried in separate locations so what family that managed to escape never knew where there dead were buried.  

How's that for a "fuck you".  Honoring dead warriors is something we've always done in all cultures in all societies as humans.  Offer homage and a place to honour warriors in our society.  That's how pissed they were.  They gave those running the military like their piggy bank no home for rest.

All punishments given out were as described in Dante's Inferno.  Every caste had their own ring of hell of punishment to be delivered as described by a religious, wacked out, long dead Italian Catholic. got so bad a country renowned for it's love of love and the good things in life, they stopped what they were doing.  Then relearned the art of torture and destruction for a single focused purpose.  The complete removal of an entire social cast.  The french weren't the only ones either.  Hundreds of examples in history.  The theme is fairly consistent though.  Couple of missed meals is all it takes.


Anusocracy's picture

Rhesus macaque monkeys have a similar behavior, suggesting a genetic basis.

The hunter-gatherer behavior is the earliest in man and liberals seem to be more inclined towards violent overthrow.

CPL's picture

The answer is Futue Te?


You don't seem to understand that these weren't "liberals" or "conservatives".  They were mostly chatle, peasants or family vassals.  A "free" man was not possible at all unless earning it by service in some way and procuring a title and land.  If someone managed to get one and live past their 40th birthday.  We couldn't begin to imagine the foul shit they would have to get to it.  Most common method was joining the army btw and pray you didn't die of disease, food poisoning, starvation, elements.  If you managed to stand out as the biggest psychopath (we are talking men that used swords mostly and their kills were in the hundreds up close) AND kept your limbs, then played the political court games, you might get to grab at the gold ring.  But during Louis's reign, nobody got the golden ring, more like the lead ring.

They were living a life that was slightly harder than being a refugee in Sub-sahara without some fruit loop begging for money on infomercials for them.  If they died, too bad.  The idea that you and I were granted a heritage of kings is laughable, maybe our ancestor acted as a spunk recepticle for a passing nobel, as was common enough.  Our ancestors were little more than cattle to these people.  Liberia would have been a fun summer spot to hang out on a toxic beach to escape the human effluent that flowed in the streets along with disease and bodies.

So current conventions don't apply at all.  If they ever did.  Politics is closer to the sale and consumption of soda pop than it is about maintaining any type of fundemental philosophy.  I am skeptical of any offered platform.  Liberal ideology to sell tshirts of che guevra and further drive the attempt to collapse society faster with more debt.  Conservative ideology to sell colouring books of flags to settle dull minds but everyone is going to pay their money that is backed with nothing but another IOU.

This isn't a left or right problem, it's well and beyond that point.   This is now a question of balance.  Not control.  Control is an illusion and a lie.  Regardless if you are TPTB or the mob settling in for a violent overthrow.  The sense of control in the situation of either party is an illusion and a lie.    

You can only be in balance.   Philosophers have discussed the point in all languages through out time.  

Anusocracy's picture

There are reasonably large differences between the morality of liberals, conservatives, and libertarians.

The development of differing moralities is what allows people to sort themselves into different political factions. The current conventions are names that basically apply to different concepts of survival.

The indignation some posters express here is moral high dudgeon - someone stepped on their moral toes.

If the threat to their morality (concepts promoting survival) becomes severe enough, they will attack, much like a cornered rat would.

Mesquite's picture

Worth re-logging in for...Thanks..

WillyGroper's picture

May I order some "Freedom Fries" with that?

jackinrichmond's picture

as a non-amerikan, i often wonder why the french are tagged as such by the msm..  the french supplied guns & ammo for the american revolution against the british.  now, the british are the good guys and the french are losers?   i don't get it.   

CPL's picture

See the weird thing about France and the French is they never apologise for who they are.  Ever.  For good and for bad.  They are French, that is that.

To be French as far as the french are concerned is the way to live.  And are happy enough with it that they don't get pushy with it (that's why a super nationalistic France scares the crap out of me, it means that model is very broken and France is in big trouble).  The term Bon Vivant.  Or 'one who lives well' is how people aim to live their lives.  It sounds odd.  But enough is enough.  Don't need to make more, when enough is enough.

Since the French have great wine, great liquors from the orchards that still cover France, great cheeses, fantastic breads, Amazing food, culturally accepted extra-marital affairs, some awesome writers and some great art to look at.  I would think everyone else outside of France was a complete moron as well.  

The french have the secret to their happiness.  Take it easy and enjoy it while you are here, hence the french fatalistic fixations in poems/art/tv/comics.  If you are French, it is very sad for you if you die because you don't get to live well anymore.  They are dark optimists.  The Gaelic/Gaulish tradition sharing the harvest that is bred to the bone for millenia.

It doesn't translate well in English because English is a minestrone of about thirty languages today (that however is another topic altogether, which is super interesting).  

Freddie's picture

Thanks for the info.  I do not dislike the French.  Their intelligence agencies call London - Londonistan. I never knew the gullotine was designed for that reason.  Beyond horrifying.  like you said - they were pissed off.

The only thing I don't understand is the French's love for Jerry Lewis.

CPL's picture

It's been described in books I've read, as the most awful love letter built for a doctors wife.  


The french love double meaning in language and in life.  Jerry Lewis always played the tragic optimist.  Life threw lemons at him in movies, and he made the best of it with a smile and friends.  If you notice in his movies, he always got the girl and life carried on to live it well.  lol  He is also a quirky guy in real life.  He's an inventor and most of the modern TV, Radio and INternet can thank him for all the processes and equipment that makes making TV easy today.  He didn't get rich from movies, he got rich by engineering better solutions where there was a demand.  Like Graham Bell, Jerry Lewis is a genius level master of hundreds of engineering patents. 


Personally I'm a marx brothers guy.  Harpo is the master there, the guy that doesn't talk at all and won't shut up about everything.

hawk nation's picture

Its the line from unforgiven. im going to kill you and all your family and all the friends of your family

CPL's picture

It's also Biblical.


Saul didn't fuck around with dealing with problems.

Pegasus Muse's picture

Doesn't one of Amerika's Great Political Traitors work for UBS?  Went there after leading the charge in the senate to gut Glass-Steagall Act. 

It is a good thing that Treason is a hanging offense without a statute of limitation.    


As of 2009, Gramm is employed by UBS AG as a Vice Chairman of the Investment Bank division. states that a Vice Chairman of a UBS division is "...appointed to support the business in their relationships with key clients."[34] He joined UBS in 2002 immediately after retiring from the Senate.[35] 

CPL's picture

For a reason.  Someone placed a society in harms way it should not be forgotten or forgiven.  The story is repeated too often in history with the outcome costing everyone something.

11b40's picture

Yes.  A bigger scum bag would be hard to find in normal times, but we had 3 from Texas all at once.  Tom Delay, Phil Gramm, and Dick Armey.  These fools did untold harm to America, and only one was ever prosecuted.

Oh, and that extended family thing in "off with theri heads" would help rid the world of Gramm's wife Wendy.  Another good thing.  If you are not familiar with her, Google Wendy Gramm Enron for your reading pleasure.  Here is just a small sampling of what you will find:

"Dr. Wendy Gramm, in her capacity as chairwoman of the Commodity Futures Trading Commission (CFTC), exempted Enron’s trading of futures contracts in response to a  request for such an action by Enron in 1992. At the time, Enron was a significant source of campaign financing for Wendy Gramm’s husband, U.S. Senator Phil Gramm.

 Six days after she provided Enron the exemption it wanted, Wendy Gramm resigned her position at the CFTC. Five weeks after her resignation, Enron appointed her to its Board of Directors, where she served on the Board’s Audit Committee. Her service on the Audit Committee made her responsible for verifying Enron’s accounting procedures and other detailed financial information not available to outside analysts or shareholders.

 Following Wendy Gramm’s appointment to Enron’s board, the company became a significant source of personal income for the Gramms. Enron paid her between $915,000 and $1.85 million in salary, attendance fees, stock option sales and dividends from 1993 to 2001.  The value of Wendy Gramm’s Enron stock options swelled from no more than $15,000 in 1995 to as much as $500,000 by 2000."


Freddie's picture

Don't forget that Paul Krugman was on Enron's payroll.  Wendy/Phil Gramm are evil scum like Krugman.

Winston Churchill's picture

I would prefer piano wire and lamposts,and a two inch drop.

mrktwtch2's picture

no since the public was not hurt by this..when are you guys going to wake up and realize how the game is really played "now your not dumb enough to beleive we live in a democracy"  gordon geko to bud fox 1987 wall street..