"Reprehensible" Lloyds Bank Agrees To $105 Million Wristslap For Manipulating Libor

Tyler Durden's picture

That will teach them! Having received full credit for for co-operation and suspending some individuals, Lloyds Bank has been fined by the CFTC the staggeringly wrist-slap-like sum of $105 million for the "manipulation, attempted manipulation, and false reporting of Libor." Total fines will amount to around $370 million across all UK and US regulators and all Llloyds divisions. As WSJ reports, the British bank becomes the seventh financial institution to strike a deal with U.S. and U.K. authorities who are conducting a long running probe into allegations of widespread attempts to manipulate Libor. With no less than the head of the Bank of England calling the bank's actions (mainpulating JPY Libor for at least 2 years) "reprehensible," and the CFTC adds individuals bevahior was a "gross breach of trust." Well we are sure after this they will never manipulate another market ever again...

 

CFTC Explains...

Banks agree to a $105 million settlement and agree to changes in systems and controls

 

The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order against Lloyds Banking Group plc and Lloyds Bank plc, formerly known as Lloyds TSB Bank plc (Lloyds TSB), bringing and settling charges for acts of false reporting and attempted manipulation of the London Interbank Offered Rate (LIBOR) for Sterling, U.S. Dollar, and Yen committed by employees of Lloyds TSB and HBOS plc (HBOS), which was acquired by Lloyds Banking Group in January 2009. The Order finds that, in a few instances, Lloyds TSB was successful in its manipulation of Sterling LIBOR and Yen LIBOR. The CFTC also brought and settled charges that Lloyds TSB, at times, aided and abetted the attempts of derivatives traders at Rabobank to manipulate Yen LIBOR.

 

The Order requires Lloyds Banking Group and Lloyds Bank to pay a $105 million civil monetary penalty, cease and desist from their violations of the Commodity Exchange Act, and to adhere to specific undertakings to ensure the integrity of LIBOR submissions in the future.

 

“By today’s action, Lloyds is being held accountable for serious misconduct,” said Aitan Goelman, CFTC Director of Enforcement. “The CFTC remains committed to taking all actions necessary to ensure the integrity of the markets we oversee.”

As WSJ reports,

The British bank becomes the seventh financial institution to strike a deal with U.S. and U.K. authorities who are conducting a long running probe into allegations of widespread attempts to manipulate the London interbank offered rate, or Libor, and other widely used interest-rate benchmarks.

...

Lloyds said in a statement: "The group condemns the actions of the individuals responsible for the conduct in question, which it regards as totally unacceptable and unrepresentative of the cultural changes that the group has implemented."

The bank's executives have long argued that their involvement in rate rigging was relatively minor compared other British lenders.

Lloyds's misconduct took place before the existing Lloyds management team took over in 2011. Nevertheless, the fine is a setback to the bank's attempt to rehabilitate its reputation after taxpayer bailouts in 2008 and 2009.

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So it appears Lloyds tried the "just the tip" excuse and it worked with a wristslap of a fine and so far no jailtime for anyone involved.