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Trader Who Made Billions For Deutsche Manipulating Libor, Has $53 Million In Bonus Clawed Back

Tyler Durden's picture





 

The name Christian Bittar is well-known to regular Zero Hedge readers. Recall from "Deep Into The Lieborgate Rabbit Hole: The Swiss Hedge Fund Link?": " just like in the case of Barclays (with Diamond), JPM (with Bruno Iksil), UBS (with Kweku) and Goldman (with Fabrice Tourre), there always is a scapegoat. Today we find just who that scapegoat is. From Bloomberg: "Regulators are investigating the possible roles of Michael Zrihen at Credit Agricole, Didier Sander at HSBC and Christian Bittar at Deutsche Bank, the person said on condition of anonymity because the investigation is ongoing." We proceeded to do a circuitous analysis to find that despite assumptions to the contrary, not only has Mr. Bittar not been expelled from the industry for manipulating Libor, but he is still collecting fat paychecks at Swiss hedge fund BlueCrest, Europe's third largest, with some $30 billion under management. Today, courtesy of Bloomberg we get the details of how Mr. Bittar departed Deutsche, and just what his responsibilities there were.

First, there were those who said manipulating Libor was at best a mere trifle, generating scrap in terms of profits. Wrong.

Bittar, who joined Deutsche Bank in 2001, was a proprietary trader specializing in short-term derivatives contracts and entitled to a percentage of the profit from his trades, the people said. He took billion-euro positions on the direction of short-term interest rates with the firm’s own money and reaped hundreds of millions of euros in profit for the bank, the people said. The bonuses Deutsche Bank pays its staff typically vest over a three-year period.

Why was Bittar let go?

The lender dismissed Bittar in December 2011, claiming he colluded with a Barclays Plc (BARC) trader to manipulate rates and boost the value of his trades in 2006 and 2007, said the people, who requested anonymity because they weren’t authorized to speak publicly. His attempts to rig the euro interbank offered rate and similar efforts by derivatives trader Guillaume Adolph over yen Libor are the focus of the bank’s probe, the people said. Both traders declined to comment for this story.

Adolph, who is Adolph?

Adolph was dismissed in December 2011 for inappropriate communications with UBS AG’s Thomas Hayes, the people said. Adolph settled out of court with Deutsche Bank after the firm tried to withhold some of his stock awards that had already vested, according to two people with knowledge of the case.

 

Adolph was responsible for inputting the firm’s submissions to the yen benchmark and trading derivatives whose values depended on it, the people said. U.S. prosecutors charged Hayes with wire fraud and price-fixing in December. His lawyers at Fulcrum Chambers declined to comment.

How were Adolph and Hayes manipulating Libor?

The Justice Department, in its December settlement with Zurich-based UBS, cited a conversation on or about May 21, 2009, between Hayes and an individual only identified as ‘Trader B.’ That trader is Adolph, two people with knowledge of the exchange said.

 

“cld you do me a favour would you mind moving you 6m libor up a bit today, i have a gigantic fix,” Hayes said, according to the filing.

 

“I can do taht,” Adolph replied. He later increased Deutsche Bank’s six-month yen Libor submission 6 basis points that day, the transcript shows. That was the first increase in the firm’s submission since March 3. It had remained unchanged since April 15.

 

“u happy with me,” Adolph asked Hayes the following day.

 

“thx,” Hayes replied.

The DB discovery was made months before the world was made aware that the primary market for determining the "fair price" of trillions in rate-linked derivatives and outrights was flatly manipulated by a cabal of bankers (although years after our first allegations in 2009).

So what did Deutsche do when it "discovered" Bittar's Libor manipulation?

Deutsche Bank’s Christian Bittar, one of the firm’s best-paid traders, lost about 40 million euros ($53 million) in bonuses after he was fired for trying to rig interest rates, three people with knowledge of the move said.

 

“Upon discovering that a limited number of employees acted inappropriately, we sanctioned or dismissed those involved and clawed back all of their unvested compensation,” Deutsche Bank spokesman Michael Golden said in a statement. “To date we have found no link between the inappropriate conduct of a limited number of employees and the profits generated by these trades.”

But first...

After the lender started to scale back its proprietary- trading operations in 2008, Bittar was named head of money market derivatives trading in 2010 and moved to Singapore. He now works for Bluecrest Capital Management LLP, Europe’s third- biggest hedge fund with $30 billion under management.

At least poor Bittar got all of his vested compensation which was what: $100 million? $200 million?

Was anybody else involved in rigging Libor at Deutsche?

Deutsche Bank’s Golden said the Frankfurt-based lender is cooperating with regulators and that its continuing internal investigation has cleared current and former management board members of wrongdoing. Co-Chief Executive Officer Anshu Jain, who said this week he was sickened by the scandal, has faced calls from German lawmakers to publish the findings of a probe by BaFin, the country’s financial regulator, into the lender’s rate-submission process. That inquiry is still to be completed.

Apparently not.

So to summarize:

  1. Deutsche tells an internal prop trader to invest billions in the Libor market,but tells him: "do everything legally and by the book or else."
  2. Bittar colludes with virtually everyone else under the sun (for a full roster of names all of which point to one place: Switzerland, and secondly Singapore, see here), to generate billions in profits;
  3. Bittar makes tens if not hundreds of millions of bonuses for himself;
  4. Finally, DB no longer can hide the deception and claws back a portion of Bittar's bonuses, while washing its hands of the full affair;
  5. Scapegoat punished, life goes on.

And then what happened to Bittar?

He now works for Bluecrest Capital Management LLP, Europe’s third- biggest hedge fund with $30 billion under management.

I.e., nothing changes.

But how is that possible? We don't know. Ask him yourself.

 


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Fri, 01/25/2013 - 13:27 | Link to Comment WALLST8MY8BALL
WALLST8MY8BALL's picture

Bittar Dregs!

Fri, 01/25/2013 - 13:43 | Link to Comment Middle_Finger_Market
Middle_Finger_Market's picture

Just emailed the cock sucker...you should to!

Fri, 01/25/2013 - 13:52 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

He broke the three cardinal rules for banksterism:

(1) Don't get caught.

(2) If you get caught, lie your ass off.

(3) If you get caught, and your lies are so ridiculous that no one could possibly believe them, make sure you have either donated a lot of money to the correct politicians, or be able to raise a lot of money for the correct politicians. This is called "Corzining" or "Pulling a Corzine".

Hard to feel sorry for him, first rule of the game is, know the rules of the game.

 

Fri, 01/25/2013 - 13:54 | Link to Comment Skateboarder
Skateboarder's picture

Dude they relocated him to keep doing the same shit he does best. He's still getting money injected up his ass and spitting it out in the form of hookers, blow, and immunity from Singapore's strict public conduct laws and such.

Fri, 01/25/2013 - 14:22 | Link to Comment SafelyGraze
SafelyGraze's picture

Tyler, you should do an article about how the silver shortage killed apple

Fri, 01/25/2013 - 15:26 | Link to Comment fuu
fuu's picture

<blink>

Fri, 01/25/2013 - 15:33 | Link to Comment SafelyGraze
SafelyGraze's picture

A déjà vu is usually a glitch in the Matrix.

 thanks for the catch

 

Fri, 01/25/2013 - 13:55 | Link to Comment derek_vineyard
derek_vineyard's picture

ackman vs. ichan     <------good battle

herbalife chart says ichan is winning!

Fri, 01/25/2013 - 16:54 | Link to Comment optimator
optimator's picture

And lie with sincerity.  Be sincere when you lie.

Fri, 01/25/2013 - 13:45 | Link to Comment slaughterer
slaughterer's picture

Adolph was a good student of mine at DB.  

Fri, 01/25/2013 - 15:12 | Link to Comment prains
prains's picture

as long as he didn't shine your apples, you're still good in my book

Fri, 01/25/2013 - 13:33 | Link to Comment ar01
ar01's picture

ZH, if you aren't careful, you're going to bring down the financial system, one crooked trader/bank at a time. 

Fri, 01/25/2013 - 13:50 | Link to Comment Skateboarder
Skateboarder's picture

If a CB creates fiat at $1B/day, the number of bankers in a particular civilization is given by ae^((x-b)^2 / (2c^2)), and the number of crooked bankers approaches sqrt(x)... how long does it take for everything to fall apart?

Fri, 01/25/2013 - 14:01 | Link to Comment donsluck
donsluck's picture

Jeez, at least define your variables.

Fri, 01/25/2013 - 15:05 | Link to Comment Skateboarder
Skateboarder's picture

Did they? ;)

Mon, 01/28/2013 - 11:25 | Link to Comment Papasmurf
Papasmurf's picture

Your equation is missing the divide by grains input.

Fri, 01/25/2013 - 13:41 | Link to Comment Dr. Engali
Dr. Engali's picture

Damn those pesky rogue traders anyway, these poor banks just can't seem to get away from them.

Fri, 01/25/2013 - 14:21 | Link to Comment EscapeKey
EscapeKey's picture

It's a good thing they all seem to struggle to get re-employed by a competitor the following day.

Fri, 01/25/2013 - 13:34 | Link to Comment LongSoupLine
LongSoupLine's picture

Fuck you DB, you knew exactly what was happening and had multiple fucking resources on it.

Fucking crooks, die assholes.

Fri, 01/25/2013 - 14:11 | Link to Comment Middle_Finger_Market
Middle_Finger_Market's picture

DB is completely insolvent. A failure. A complete an utter FAILURE as a bank. It doesn't get any more soul destroying than that. We can look away and move on, DB is a failure. 

Fri, 01/25/2013 - 14:21 | Link to Comment EscapeKey
EscapeKey's picture

Unlike RBS? Or HBOS? Or Danske? Or Santander? Or MS? Or JPM? Or...

The entire system is bankrupt. Both financially and morally.

Fri, 01/25/2013 - 13:37 | Link to Comment krispkritter
krispkritter's picture

Oooh, that's going to leave a mark...

Fri, 01/25/2013 - 13:37 | Link to Comment fuu
fuu's picture

“cld you do me a favour would you mind moving you 6m libor up a bit today, i have a gigantic fix,” Hayes said, according to the filing.

“I can do taht,” Adolph replied. He later increased Deutsche Bank’s six-month yen Libor submission 6 basis points that day, the transcript shows. That was the first increase in the firm’s submission since March 3. It had remained unchanged since April 15.

“u happy with me,” Adolph asked Hayes the following day.

“thx,” Hayes replied."

Best and brightest.

Fri, 01/25/2013 - 13:56 | Link to Comment Skateboarder
Skateboarder's picture

Aren't you glad the world's money rests in the hands of men who went full retard?

Fri, 01/25/2013 - 15:11 | Link to Comment fuu
fuu's picture

It's rad.

Fri, 01/25/2013 - 13:37 | Link to Comment walküre
walküre's picture

Bittar's bonus from the fraud was 53 million.

How much did the fraud generate for the bank as a whole? In other words what amount was the bonus based on?

Fuck you Deutsche Bank.

Fri, 01/25/2013 - 15:53 | Link to Comment pitz
pitz's picture

Douche Bank

Mon, 01/28/2013 - 11:29 | Link to Comment Papasmurf
Papasmurf's picture

The illegal bankster profits should be clawed back and distributed to the owners of FRN's.

Fri, 01/25/2013 - 13:39 | Link to Comment ziggy59
ziggy59's picture

Who says crime doesn't pay?

Fri, 01/25/2013 - 14:24 | Link to Comment EscapeKey
EscapeKey's picture

It doesn't if we all do it.

That's why the corrupt elite is so busy telling you that you shouldn't.

Fri, 01/25/2013 - 13:43 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Can you say "scapegoat"?

Come on everyone. All together now.

<Ignore the good banks and just focus on the bad people.>

Fri, 01/25/2013 - 14:27 | Link to Comment Dr. Engali
Dr. Engali's picture

Yeah but he was "punished" by having 53 million dollars clawed back  See the sytem works ,and justice is seved. Surely we can put this whole thing to rest now. So let's talk about American Idol

Fri, 01/25/2013 - 13:44 | Link to Comment kliguy38
kliguy38's picture

ONE MILLION DOLLARS!!!!!!!!!!!!!!!!!!!!!!!!!!!

Fri, 01/25/2013 - 13:51 | Link to Comment Manthong
Manthong's picture

53 million bonus..  plus even more than that previously.. other peoples money.. gambling and rigging the system..

no justice..

there should be no peace.

Fri, 01/25/2013 - 13:51 | Link to Comment DavidC
DavidC's picture

Co-Chief Executive Officer Anshu Jain is sickened, sickened I tell you, by this scandal...

DavidC

Fri, 01/25/2013 - 13:59 | Link to Comment Seasmoke
Seasmoke's picture

i say let him keep all the money and then hang him

Fri, 01/25/2013 - 14:16 | Link to Comment ziggy59
ziggy59's picture

How come street crooks (not the wall bankster types) , drug dealers(no, not the pharmacy cos) etc. have to return all the gotten through their crimes yet these schmucks get to keep most of it, don't go to jail, etc..

No, I vote hang em and give the money back to those that were ripped off

Fri, 01/25/2013 - 14:23 | Link to Comment Downtoolong
Downtoolong's picture

Co-Chief Executive Officer Anshu Jain, who said this week he was sickened by the scandal.

Shocked, just shocked to discover something like this going on right under our noses.

I guess that’s what the top brass gets paid the big bucks for these days, to be properly shocked whenever there's a scandal. 

Sounds like job security for life to me.

Fri, 01/25/2013 - 15:28 | Link to Comment YouAreBliss
YouAreBliss's picture

America's culture of "Cheaters Win!" Has now gone Global - good job America!

 

I hope that 7 Tour deFrance wins for our dopped up Super Hero teaches the French a thing or two!  Go after Banksters - how dare they!!!!!!

Don't they know in the good old USA - cheaters always win and win big!  God Bless America!   Let Bernie out of jail - he can run the NYSE next.

Fri, 01/25/2013 - 15:29 | Link to Comment pitz
pitz's picture

Why do producers even....bother producing, when the system brings almost no meaningful punishment, and actually rewards scammers of this nature?

This man's $53 million wouldn't have any value if we all would refuse to accept his fiat as having any value whatsoever.  Whether it be through selling our labour for the fiat, or worse, selling our assets for the fiat money.

Fri, 01/25/2013 - 15:57 | Link to Comment pitz
pitz's picture

Looking on the bright side, all we need to do is run a query on a Bloomberg terminal to determine who was working in the financial industry in the past 2 decades -- and then summarily send them all to the gallows once the worldwide economy collapses.

Bloomberg, in this case, has done something very useful. 

Fri, 01/25/2013 - 16:52 | Link to Comment pndr4495
pndr4495's picture

Can anyone else feel the grassroots anger welling up inside the common man's gullet ?  When , where , and how will this show itself ?  It feels APOCOLYPTIC even.  I hope it isn't.  People who play with the financial lives of others should be made penniless.

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