• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

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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Mon, 12/24/2012 - 10:56 | 3092740 lakecity55
lakecity55's picture
Does Libor Manipulation Deserve The Death Penalty?

yes.

Mon, 12/24/2012 - 13:32 | 3093207 eatthebanksters
eatthebanksters's picture

Why do you think TPTB want gun control?

Mon, 12/24/2012 - 14:25 | 3093338 AE911Truth
AE911Truth's picture

The FED devaluing the currency, supressing the price of money is also a crime per the US Constitution, wherein the punishment is also specified.

Yet, supressing the price of Silver has been public policy of the US Government since 1965.

Quote from President Johnson remarks while signing Coinage Act 1965:

"If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content. "

Source:
http://www.presidency.ucsb.edu/ws/index.php?pid=27108

Thank you GATA for finding and presenting this fact.

Mon, 12/24/2012 - 17:03 | 3093662 Freddie
Freddie's picture

LBJ - the same evil f***** who gave us the Vietnam War so he could get even richer.  Also gave us the parasite class who voted for the islamic.   hopefully LBJ and McNamara are burning in hell like Dante's Inferno.

Mon, 12/24/2012 - 17:37 | 3093718 11b40
11b40's picture

Along with Nixon, and holding a place for Kissinger, right Freddie?

Mon, 12/24/2012 - 18:48 | 3093807 Freddie
Freddie's picture

Kissenger no doubt.  Nixon maybe gets purgatory.   No he sucked but he did not get very very rich of the Vietnam War like LBJ.  Nixon left office broke.  LBJ was the second wealthiest ex-President after G Washington.  Washington owned huge tracts of land in VA.  Inflation adjusted, Washington would be a billionaire.

Nixon probably deserve it for taking us off the gold standard.  BTW - LBJ and his cronies whacked JFK.  Vietnam was just too much damn money for LBJ to pass up and the Kennedys were in the way.

Mon, 12/24/2012 - 10:58 | 3092742 Cognitive Dissonance
Cognitive Dissonance's picture

"Yet one wonders: will current and future ongoing market manipulations ever cease when there is no real deterrent:...."

Not only is there no deterrent, but the economic system is now entirely dependent upon exponentially increasing manipulation. The addict is thoroughly hooked.

Cold turkey is the only solution here and the ugly truth is that the vast majority don't want "it", regardless of how angry they become with the oftentimes blatant corruption.

Mon, 12/24/2012 - 11:03 | 3092761 malikai
malikai's picture

With some advanced addictions and degraded health, cold turkey means death.

Mon, 12/24/2012 - 11:16 | 3092783 Cognitive Dissonance
Cognitive Dissonance's picture

Then so be it.

I find it interesting that this is precisely the excuse used for the increasingly terrible acts perpetrated by the US (to name just one) government, corporations and shadow controllers. Get the person hooked on economic crack and then carefully explain that to force the addict to withdraw from the crack is life threatening, thus to do so is effectively a cruel and unusual punishment. This explanation serves to justify and rationalize keeping the addict hooked AND enslaving the following generations.

This is evil incarnate.

Mon, 12/24/2012 - 11:29 | 3092828 malikai
malikai's picture

Indeed.

I just hope the coroner correctly attributes COD.

Mon, 12/24/2012 - 11:53 | 3092904 Salon
Salon's picture

Bush did it.

Uhhhh..... And free markets.

Forward!

Mon, 12/24/2012 - 11:47 | 3092858 DaveyJones
DaveyJones's picture

You remind me of that scene from THe Bad Lieutenant with Harvey Keitel where the aging corrupt cop is snorting crack at an elephant's pace and the young kid says man slow down that shit will kill you, Keitel snaps around and says what are you? a fucking drug counsellor? no you're a fucking drug dealer, so shut the fuck up.

That's what this Christmas is all about Charlie Brown

and again, happy holidays 

Mon, 12/24/2012 - 12:31 | 3093018 Ignatius
Ignatius's picture

Dependent classes divided in two = control mechanism.

Thanks, CD, always insightful.

Mon, 12/24/2012 - 11:17 | 3092784 jayman21
jayman21's picture

With some advanced addictions and degraded health, cold turkey means death.

 

Then let the creative destruction begin....

Mon, 12/24/2012 - 11:20 | 3092800 GMadScientist
GMadScientist's picture

Also not cold turkey means death.

 

Mon, 12/24/2012 - 10:58 | 3092743 williambanzai7
williambanzai7's picture

Phil Gramm's gangsta homeboys in the TBTF Hood.

Mon, 12/24/2012 - 11:00 | 3092749 Seasmoke
Seasmoke's picture

People are already being killed because of it.

Mon, 12/24/2012 - 11:01 | 3092750 fuu
fuu's picture

I heard that this isn't really a good example of market manipulation since the bank hurt itself while hurting others, it's an easy fix, and no one is responsible for their behavior because they are foxes.

What we really need is a Manipulation Caesar.

Mon, 12/24/2012 - 11:01 | 3092755 Racer
Racer's picture

When the banksters get away with massive criminality against a huge number of people, yet the full force of the law comes down on the sheeple for very minor infringements, then YES the banksters must be punishished to the maximum.

Mon, 12/24/2012 - 11:05 | 3092764 Silver Garbage Man
Silver Garbage Man's picture

They are going after the guns because the entire system is going to crash by design and you can't let the slaves have guns.
Got Silver?

Mon, 12/24/2012 - 11:56 | 3092913 Salon
Salon's picture

Too late.

Mon, 12/24/2012 - 11:06 | 3092767 MyBrothersKeeper
MyBrothersKeeper's picture

I saw "The International" a few months ago.  It is scary how many parralells (Sp) there are with what ius going on in the world today.  Add the fact that the UN wants to regulate small arms trade and it makes you believe the movie is more thruth than fiction.  Rent it.

Mon, 12/24/2012 - 11:12 | 3092779 williambanzai7
williambanzai7's picture

Those fuckers ALL think they are above the law.

"Initiative comes to thems that wait"--Clockwork Orange

Mon, 12/24/2012 - 11:23 | 3092806 DaveyJones
DaveyJones's picture

William, it is weird how every Kubrick film is playing out before our eyes

All I want for Christmas is a return on my savings

Merry Christmas everyone

Remember to shop responsibly

and avoid anyone named Cliff 

Mon, 12/24/2012 - 11:13 | 3092781 zanez
zanez's picture

Does anybody have Charles Bronson's phone #?

Mon, 12/24/2012 - 11:41 | 3092867 urwright
urwright's picture

why wait?

look in tbe mirror and say "i am charles bronson" and then go do what he would

like you are any smaller or can do less physically than he could then?

or is your comment a joke about how much of a joke you and your perspective is?

Mon, 12/24/2012 - 12:12 | 3092965 Tortuga
Tortuga's picture

If they do, they are better than Houdini. He's gone to his reward already.

Mon, 12/24/2012 - 13:52 | 3093258 Pseudo Anonym
Pseudo Anonym's picture

right,

Does anybody have Charles Bronson's phone #?

why should you do anything about it when there's always somebody else to do it for you, right?

"they", not you, but "they" should do it.  not you.

Mon, 12/24/2012 - 11:18 | 3092782 q99x2
q99x2's picture

International corporate vigilantism is the natural progression as the system collapses. Unprosecuted fraud by paying off Holder, Obama and others leads to forced justice. Whoever thinks that by buying the US Attorney General they can stop justice is fooling themselves. Justice will be served more and more independently of the justice system. Gang warfare on a global scale bitchez. I imagine soon nationalists will be going after the Rockefellers and Rothchilds families directly.

Mon, 12/24/2012 - 11:37 | 3092850 urwright
urwright's picture

there will always be stories disney will lead you to believe are obvious and altruistic.

there will always be a master and there will always be the majority who will be considered slaves

but there was only one Jesus, Mohammad, Ghandi...

yet no one here is capable of seeing beyond the eternal struggle as they really want to be blind as it it the life of least resistance that makes ordinary men and the path of the obvious and altruistic for real heros

dont be a hero as no one in this life will care anymore

Mon, 12/24/2012 - 12:11 | 3092962 Tortuga
Tortuga's picture

IMHO, the crimes have been going on much longer than the current administration. Hanging all lawyers, banksters and their ho politicians, past and present, would be a magnificent beginning.

Mon, 12/24/2012 - 11:17 | 3092795 Bicycle Repairman
Bicycle Repairman's picture

Why don't we just fire some people?  Baby steps that don't require the whole litany of philosophical baggage that goes with death.  Just send up security and escort them out.  Yes, give them boxes to put their stuff in.

Mon, 12/24/2012 - 11:21 | 3092804 GMadScientist
GMadScientist's picture

Because shuffling the deck chairs doesn't address the problem of a self-regulated industry.

Mon, 12/24/2012 - 11:42 | 3092870 Bicycle Repairman
Bicycle Repairman's picture

I'm just looking for a start.  An admission that something must change. A little disincentive in the system.

Mon, 12/24/2012 - 12:00 | 3092927 Salon
Salon's picture

You cant fire peoPle who know too much.

You give them bonuses.

You can only fire the most peripheral least connected player

Mon, 12/24/2012 - 12:36 | 3093031 Winston Churchill
Winston Churchill's picture

The time for tinkering at the edges has long gone.A lot of blood is going to be spilled.

The best defense is offense.

Mon, 12/24/2012 - 13:32 | 3093211 Bicycle Repairman
Bicycle Repairman's picture

If you insist on blood, nothing will happen.

Mon, 12/24/2012 - 22:27 | 3094065 Anusocracy
Anusocracy's picture

A designed by government self-regulated industry.

Government being the operative word.

Mon, 12/24/2012 - 11:24 | 3092799 IamtheREALmario
IamtheREALmario's picture

I have a more complete solution. Return personal responsibility as well as civil law to the world. There should be no hiding behind a corporate veil ... develop and encourage dragon slayers ... and if that means that fewer people are willing to be CEOs and CFOs because of the crimes that their companies commit then so be it. It is a "fair" solution and there will be greater diversity of offerings, with less mega-controllers who cheat.

There is so much fraud in the world, much of it created by bankers, their masters and puppet politicians that it is hard for me to single out libor as a greater crime than any other.

Think on "this" for a second ... human beings always seem to be at their best and make their greatest strides forward when faced with adversity or a challenge of some kind. Too little adversity and we are fallow, too great and we perish. It is a delicate balance to keep us moving along. Consider today, we have a global population which is growing rapidly, which would indicate too little adversity. And yet, we are faced with the corruption of our governments, wars, the parasitic nature of banks, the removal of our means of subsistence and mass mind programming... but the more history I read, the more I understand that we have always been faced with this corruption from within and without.(Why, is the more important question?)

If my understanding of the above is correct then it may provide some clues of the nature of "satan" who is the adversary and how the concept plays a vital role in the development of man... by providing the adversity required to move us along. Recall that his number is "666" and I forget how the phrase goes, but it says that 666 is also the number of man (you see, using some not so esoteric numerological equivalents: 6+6+6= 18; 1+8=9 and nine is the number of man). You may also recall that 144000 will survive. and you guessed it 1+4+4+0+0+0=9 ... once again man. We are our own enemy, and maybe there are some who believe that they have been assigned the role of the adversary or worship the adversary (possibly those such as Lloyd Blankfein, who claims to do "gods' work"). But, in our infantile state as a species, IMO we may need an adversary to keep developing, especially with a world of plenty... and maybe that is a key to understanding the "grand experiement".

Mon, 12/24/2012 - 11:21 | 3092803 DOT
DOT's picture

Padlock the doors.

Seize US holdings,and liquidate.

Forbid doing business with any company or country that does business with UBS.

www.youtube.com/watch?v=3OOF0FpKiYk

Cross the streams.

Mon, 12/24/2012 - 11:25 | 3092809 Ignorance is bliss
Ignorance is bliss's picture

People work to enrich themselves, and they avoid actions that cause financial or physical harm to themselves. By not prosecuting Liebor manipulation, housing manipulation, unjustifiable wars, war crimes, fraud, metals manipulation etc.. TPTB have created a system where the top 1% are permitted to steal from the other 99%. They pillage with no fear of reprisals or repercussions.  This situation has created a systemic fear of the system. It is growing and has reached a tipping point. This tipping point has manifested itself in the form of consistent stock market withdrawals, gun sales, hoarding, increased criminal activity, gangs, drugs, suicides, increased debt, dog food sales among the elderly,  etc...

Mon, 12/24/2012 - 11:26 | 3092818 espirit
espirit's picture

And a bigger question - is this the main preemptive reason for the gun control push seen so vividly in recent days and months?

Can't have the Oligarchs security forces armed with the same weaponry as the 99%, now can we?

Just sayin'.

Mon, 12/24/2012 - 11:30 | 3092832 Eally Ucked
Eally Ucked's picture

All banks outside US are fraudulent enterprises, what about US ones? I bet they're angels.

 

Mon, 12/24/2012 - 14:01 | 3093278 TPTB_r_TBTF
TPTB_r_TBTF's picture

The US banks are fully under the control of the European Oligarchs. Does that answer your question?

Mon, 12/24/2012 - 11:42 | 3092871 Itch
Itch's picture

Happy christmas you fucking lunatics.

Mon, 12/24/2012 - 12:08 | 3092951 Tortuga
Tortuga's picture

Merry Christmas to you, also. Magnificent sentiment.

Mon, 12/24/2012 - 11:52 | 3092900 Schmuck Raker
Schmuck Raker's picture

The problem I have with giving bankers the death penalty is that you only get to do it once.

Mon, 12/24/2012 - 12:03 | 3092936 Salon
Salon's picture

I regret that you have but one life to give to your country

Mon, 12/24/2012 - 12:02 | 3092935 loveyajimbo
loveyajimbo's picture

The ones who really have to worry about the little people rising up and taking direct, violent action are the elected politicians who betray them every day by allowing the Constitution to be shit on, the financial criminal asslicks to plunder without punishment, the Supremes to allow the purchasing of our elections by corrupt corporations, abortions like the TSA, domestic drones, the murder of our representitives in benghazi, and the insane, intentional bankrupting of our nation through massive spending and money printing... may their worst nightmares come true... and soonest.

Mon, 12/24/2012 - 12:06 | 3092944 Tortuga
Tortuga's picture

I went to a criminal court with a friend of mine that is a legal office courier and sat in on a criminal court case while waiting for him to get through. The case was a piss ant case, I thought, because the young man on trial, with a court appointed attorney, was charged with drunk and disorderly and busting into a soda machine and stealing $5.85 from the machine. He was given 5 yrs hard time at Huntsville state prison by the judge. Death penalty should be given to banksters, all lawyers and the ho politicians, both parties, in DC. It's only fair.

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