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The Hedge Fund Trail In Liborgate Gets Hotter: Mega Fund Brevan Howard Next?

Tyler Durden's picture





 

Two days ago we made the "missing link" connection between traders in Libor manipulating banks (all of which curiously had a hub in Singapore: something else for the media that has been about 4 years too late on this topic to focus on) and hedge funds (most of which curiously centering on the otherwise sleepy bastion of banking: Geneva, Switzerland). The immediate aftermath was the loss of trading privileges of one Michael Zrihen. We are fairly certain this is just the beginning of the hedge fund bust: when all is said and done, many more funds will have terminated traders they hired for reasons (and kickbacks) unknown over the past 2 years as Lie-bor manipulators sought to put a clean firewalled break between their old employer and current one. Because apparently sometimes the regulators are that stupid and can be confused by a simple job change. And while many have assumed (and even calculated based on completely groundless assumptions) that only BBA member banks have benefited from Libor manipulation, the reality is that hedge funds were just as complicit and benefited just as much if not more. What is worse, they took advantage of their whale client status with manipulating banks, and courtesy of Total Return Swap and other leveraged gimmicks, made far more money when they co-opted two or more banks to do their bidding. Impossible you say: hedge funds would never be so stupid. Oh very possible: we present exhibit A - Brevan Howard, a "fund, with assets of $20.8 billion as of Dec. 31, has never had a losing year and returned 14.4 percent annualized from its April 2003 inception through the end of 2008" as Bloomberg said in a made to order profile of the funds recently. Perhaps there is a very simple reason for this trading perfection: "Brevan Howard telephoned on 20 Aug 2007 to ask the defendant to change the Libor rate," according to a paper filed with the Singapore High Court cited by Bloomberg."

Here is The Telegraph with a smoking gun that was promptly buried in the avalanche of sudden media coverage in the aftermath of the Barclays Liborgate settlement.

Tan Chi Min, a former RBS trader who claims he was wrongfully dismissed by the bank after it fired him for allegedly trying to manipulate Libor - the average rate at which banks lend to each other - said he had received the request in 2007 from Brevan Howard. 

 

"Brevan Howard telephoned on 20 Aug 2007 to ask the defendant to change the Libor rate," according to a paper filed with the Singapore High Court cited by Bloomberg.

Oops.

That one statement should be enough to send shivers into the heart of whoever may be General Counsel of Brevan Howard (and many other mega funds right now whose names will make front page appearances in the coming weeks), as it provides the banks with something that so far has been missing. Motive. Because while it may be difficult to prove that Barclays or RBS benefited from Libor manipulation, pandering to a mega client is very, very easy to prove - there is always a trace. It also makes it very easy for the prosecution to include hedge funds, which are just as hated by the general populace as big banks if not more, into what is shaping up as one perfect litigation storm (and distraction from the real culprit here: the global central bank cartel).

Telegraph goes on:

The court filing alleges RBS "received this request without objection". Brevan Howard is not a party to the lawsuit and is not being investigated or sued for any alleged wrongdoing. RBS and Brevan Howard both declined to comment.

 

Mr Tan claimed in his filing that Scott Nygaard, head of short-term markets finance at RBS, knew about the call from Brevan Howard. However, the filing contained no further details to support his allegations. However, he is reported to have said he would provide further evidence at a later stage.

 

The legal case follows Mr Tan's firing in December over allegations he had attempted to improperly influence RBS's Libor-setting staff between 2007 and 2011. Mr Tan, who worked for RBS in Singapore as head of delta trading, claims he was wrongfully dismissed by the bank.

Ah yes our old friends: the ubiquitous Delta Traders who somehow have a finger in everything from ETF trading, to gamma, to convexity trades, and now- serving as the nexus between Libor manipulation demanding clients and in house Libor fixers.

The plot just gets thicker and thicker.

Mr Tan is claiming $1.5m (£943,000) in bonuses and 3.3m RBS shares that he says the bank owes him in pay. He claims in his lawsuit that asking for changes in Libor was "common practice" among RBS traders and that the bank "took requests from clients" to alter the rate.

And there it is: "Took requests from clients" not just manipulated rates for its own interest. And this is where the universe of guilty parties explodes exponentially, and reaches not only Geneva Switzerland, but virtually every single hedge fund that had even a modest fixed income trading link over the past decade.

Watch this space closely: it will get very hot soon.

 


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Fri, 07/20/2012 - 12:59 | Link to Comment Joebloinvestor
Joebloinvestor's picture

GREAT WORK TYLER!!!!!!!

Zero Hedge is the only "news service" that is ahead of the curve.

Fri, 07/20/2012 - 13:05 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

Ann Barnhardt says GET OUT.

 

http://tinyurl.com/br9f6vu

Fri, 07/20/2012 - 13:31 | Link to Comment iDealMeat
iDealMeat's picture

LIBOR is the Black Swan.  JPM will use it as a distraction to continue manipulating metals and blame the drop on the strengthening USD.

 

Wait for the sale.

Fri, 07/20/2012 - 13:37 | Link to Comment sqz
sqz's picture

ZH, you want more names, especially re. Brevan Howard, check this out:

http://www.ft.com/cms/s/0/6e5d1d0e-694e-11e1-9618-00144feabdc0.html

- Philippe Moryoussef

- Thomas Hayes

- Christopher Cecere (Brevan Howard)

Fri, 07/20/2012 - 13:52 | Link to Comment Concentrated po...
Concentrated power has always been the enemy of liberty.'s picture

Tyler,

Who can I contact to have Liebor lowered a bit?  I've got an adjustable rate loan that would benefit...

Love,

-Concentrated power has always been the enemy of liberty.

Fri, 07/20/2012 - 14:20 | Link to Comment Arius
Arius's picture

dude - the game is over now ...

 

Fri, 07/20/2012 - 14:46 | Link to Comment Concentrated po...
Concentrated power has always been the enemy of liberty.'s picture

Oh...

Then how do I get on the twitter feed for the next time CocaCola trades like a saw tooth? 

I'm trying to fund a downpayment on a new place in St. Bart's.

Thanks in advance,

Best,

-Concentrated power has always been the enemy of liberty

Fri, 07/20/2012 - 17:45 | Link to Comment Dr Benway
Dr Benway's picture

I despair that the proportion of the population that cares about this is very low. I wonder if it always was like this. Then I think of the outrage after the South Sea bubble.

 

Maybe this level of complacency can only be reached by civilizations in their end-stage, old complacent and fat.

Fri, 07/20/2012 - 14:33 | Link to Comment Disenchanted
Disenchanted's picture

 

 

A couple of other sort of O/T items from the BBC and today's Telegraph:

 

IMF's Peter Doyle scorns its 'tainted' leadership


Christine Lagarde and Nicolas Sarkozy embroiled in new corruption inquiry

 

 

Fri, 07/20/2012 - 14:53 | Link to Comment Disenchanted
Disenchanted's picture

 

 

 

 

This from Glen Ford @ the Black Agenda Report...linked at Information Clearing House. I listen to Glen Ford on satellite radio periodcally and he cuts Oblahma no slack. Always very informative. Not saying I agree with all of Mr. Ford's positions, just saying I always learn something new when I do hear him.

 

 

Obama’s Justice Department Rushes to the Rescue of LIBOR Criminals

By Glen Ford

 

July 18, 2012 "Information Clearing House" --   The Obama Justice Department is in theater mode, again, pretending to threaten the bankster class with criminal penalties – prison time! – for their manipulation of the global economy’s benchmark interest rates. The Justice Department claims to be building criminal and civil cases in the LIBOR scandal, which in sheer scope is the biggest fraud by international capital in history. But that’s all a front, a farce. Barack Obama has spent his entire presidency protecting Wall Street, starting with his rescue of George Bush’s bank bailout bill after it’s initial defeat in Congress, in the last days of Obama’s candidacy. He packed his administration with banksters, passed his own bailout and, in collaboration with the Federal Reserve, channeled at least $16 trillion dollars into the accounts of U.S. and even European banks – by far the greatest transfer of capital in the history of the world. Obama has reminded the banksters that it was he who saved them from the “pitchforks” of an outraged public. He pushed through Congress so-called financial reform legislation that left derivatives – the deadly instruments of mass financial destruction that were at the heart of the meltdown – untouched.


Wall Street may or may not remain loyal to Obama, but Obama has been loyal to Wall Street, the guys who gave him the campaign cash to become a viable candidate. His Attorney General, Eric Holder, a corporate lawyer to the core, is busily staging a pre-emptive LIBOR prosecution of bankers in order to shield them from legal action by a host of other government agencies and, ultimately, from the global universe of parties that have been harmed by the bankster’s schemes– a list that stretches to infinity. Holder’s job is to monopolize the LIBOR case, to the extent legally and humanly possible, grabbing jurisdiction and consolidating the cases against the banks with the aim of reaching a settlement that does not further destabilize the financial system.


Holder and his boss already pulled that trick earlier this year with settlement of the bank “robo-signing” scandal – a scheme that would have ranked as the “crime of the century” until LIBOR came along. A small group of state attorney generals were holding up an administration-brokered settlement that effectively gave the banksters immunity from prosecution, in return for a measly $25 billion payout. Obama used every power of his office to pressure the state law officers into line. The last one capitulated with a promise from Obama that a “special unit of prosecutors” would expand the investigation into abusive mortgages practices. You haven’t heard a peep about it, since.


Now Obama and Holder are playing the same diversionary game, making tough noises about criminal investigations of the LIBOR conspirators. But the Justice Department has already given immunity to Barclay’s Bank, of Britain, and to the Swiss banking giant UBS. More immunities will follow. The reason Eric Holder is staging criminal investigations is because that’s the only way he can protect the bankers, through immunities and by gradually narrowing the scope of the case. In the end, there will be settlements all around, and the banksters will move on to even more fantastic heights of criminality – thanks to the loyal, protective hands of President Obama.


BAR executive editor Glen Ford can be contacted at Glen.Ford@BlackAgendaReport.com.


This article was originally published at Black Agenda Radio


also here: http://www.informationclearinghouse.info/article31919.htm

Fri, 07/20/2012 - 13:49 | Link to Comment bonddude
bonddude's picture

With billions in MBS and Trillions in CDO/CDS there couldn't be any way the big banks AND their customers would demand a little nudge here or there is there? By far the biggest manipulation ever. What would happen if no one honored another fuckin contract ? Burn the mutha down !

Fri, 07/20/2012 - 14:37 | Link to Comment Manthong
Manthong's picture

Gee, if they cannot criminally manipulate the money flows to their advantage anymore, how are they going to be able to continue reliably posting profits quarter after quarter?

Fri, 07/20/2012 - 14:03 | Link to Comment tmosley
tmosley's picture

No.  If you wait, you might miss it.  Just buy some every month.

Fri, 07/20/2012 - 15:09 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ $55,000

Fri, 07/20/2012 - 17:57 | Link to Comment constantine
constantine's picture

It is great work as usual but why would we assume that any of this will go prosecuted?  It'll just be pushed under the carpet with the same old fillibuster and stall techniques (Corzine).  What am I missing?  Public outrage will need to increase exponentially before the real cannabilization of the financial sector begins.

Fri, 07/20/2012 - 19:43 | Link to Comment Buck Johnson
Buck Johnson's picture

And the MSM is doing everything they can to bury this story.

Sat, 07/21/2012 - 02:22 | Link to Comment James_Cole
James_Cole's picture

"Ah yes our old friends: the ubiquitous Delta Traders who somehow have a finger in everything from ETF trading, to gamma, to convexity trades, and now- serving as the nexus between Libor manipulation demanding clients and in house Libor fixers."

lol

Fri, 07/20/2012 - 13:00 | Link to Comment PaperBear
PaperBear's picture

Round 2 … ding, ding.

Fri, 07/20/2012 - 13:45 | Link to Comment ITrustMyGut
ITrustMyGut's picture

thank you TD's and ZH for these ongoing cutting edge investigative shizzle!

 

Justice! maybe... one day...

Fri, 07/20/2012 - 13:01 | Link to Comment qussl3
qussl3's picture

But Singapore is the shining light, a beacon of integrity and good governance.

The marketing brochures promised!

Fri, 07/20/2012 - 13:20 | Link to Comment Unprepared
Unprepared's picture

What happens inside those glass buildings is pre-approved by the Pope himself.

Fri, 07/20/2012 - 14:32 | Link to Comment Nobody For President
Nobody For President's picture

What happens inside those glass buildings stays inside those glass buildings.

(Until some trader loses his job and bonus and squeals his guts out.)

Fri, 07/20/2012 - 13:26 | Link to Comment Tinky
Tinky's picture

I'll wait for Simon Black to confirm the story before I believe it.

Fri, 07/20/2012 - 13:30 | Link to Comment williambanzai7
williambanzai7's picture

Offshore haven is the term you are looking for.

Fri, 07/20/2012 - 13:10 | Link to Comment printmoremoney
printmoremoney's picture

Exposing criminals does not stop them. Prosecuting them does not stop the Central Bank Cartel. They claim the right to be immortal. They are above any and all laws of countries. We live on a slave planet until they die like the rest of us.

Read the BIS Charter for their own language on their "immunity" from taxes, confiscations, penalties, oversight, immunity from prosecution. It is on their public web site. 

You, and me, and Tyler live in a different world from that. Until it changes....

And change is possible.

Kudos to Tyler for playing his part.

Fri, 07/20/2012 - 14:34 | Link to Comment epwpixieq-1
epwpixieq-1's picture

The problem is that there is so much "paper build wealth" that is very liquid ( try doing that with bullions ),  that now the biggest competition is for its redistribution, and any interested, and well funded party, will try to push the market in its favour. Everyone would do that in their place, if they can, I bet you on that. Everyone will push the market so they can get little more.

A simple destroy all "paper wealth" (rest the system), and this will force most of the people, from the Western Nations, to engage in wealth creation instead of wealth redistribution.

But the only way that we ( by experience ) know that can happen is by Inflation. So let it be, and we will see a light at the end of the dark tunnel.

Fri, 07/20/2012 - 13:07 | Link to Comment Piranhanoia
Piranhanoia's picture

I get a sinking feeling the news will be coopted to cover a string of disasters so settlements between organized crime and their governments can be hidden.

Fri, 07/20/2012 - 13:15 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

feeling, or knowing?  I say knowing.

Fri, 07/20/2012 - 13:56 | Link to Comment roadhazard
roadhazard's picture

It's working so far. Bus bombing, movie theater shooter and tigers, oh my!

Fri, 07/20/2012 - 13:10 | Link to Comment Downtoolong
Downtoolong's picture

I think I'm starting to get a sense of where Madoff and his feeder funds learned everything they know about retroactive price fixing.

 

Fri, 07/20/2012 - 13:10 | Link to Comment j0nx
j0nx's picture

Who gives a shit about hedge funds. I want to know how much extra I have been charged for gas over the past 2 years so I can start my class action lawsuit.

Fri, 07/20/2012 - 13:58 | Link to Comment roadhazard
roadhazard's picture

A peak oiler will be with you shortly.

Fri, 07/20/2012 - 13:15 | Link to Comment Josh Randall
Josh Randall's picture

Time to NAIL the WHALE boys, just like college

Fri, 07/20/2012 - 13:51 | Link to Comment bonddude
bonddude's picture

So its closing time then?

Fri, 07/20/2012 - 13:56 | Link to Comment Dr. Engali
Dr. Engali's picture

Don't remind me about nailing the whale in college....I was pretty drunk then and what I woke up to scared the bajeebus out of me. I prefer to keep that memory in the bottle....so to speak.

Fri, 07/20/2012 - 13:18 | Link to Comment pleseus
pleseus's picture

Madoff like returns.

Fri, 07/20/2012 - 13:43 | Link to Comment earleflorida
earleflorida's picture

B H Global -- HedgeHog Incubator

Singapore the bipolar-twin of Luxembourg regarding osmosis elasticities inane proficiency.

thanks Tyler 

Fri, 07/20/2012 - 13:27 | Link to Comment Yen Cross
Yen Cross's picture

 I'm not taking sides here.  Hedge "vulture" Funds , called out the douche bag ( wanabe), European Technocrats when they tried to renege on Greek bond seniority!

  Everyone has their place @ the TROUGH.  It's not my fault those butt pirates @ CNBS / can't short a trade!

Fri, 07/20/2012 - 13:37 | Link to Comment sitenine
sitenine's picture

We are well past peak ponzi. The relentless exposure of massive fraud and corruption proves it. Financial apocalypse cometh. Prepare or be destitute. I have no further comment or feelings on the matter.

Fri, 07/20/2012 - 13:34 | Link to Comment Zola
Zola's picture

Exactly... And oh surprise they were riding Bernanke' **** last year after the downgrade... by loading up on the long bond... Now when do we hear from the long hair GLG guy who will again scoff on Gold ?

Fri, 07/20/2012 - 13:36 | Link to Comment Dull Which
Dull Which's picture

Mr Tan is clearly not the sharpest knife in the drawer. 3.3m RBS shares.

WTF? They are not worth the paper they are printed on - I know, I am a british taxpayer!

Fri, 07/20/2012 - 13:37 | Link to Comment hustler etiquette
hustler etiquette's picture

Sounds like a good plot for Rush Hour 4

Fri, 07/20/2012 - 13:40 | Link to Comment vote_libertaria...
vote_libertarian_party's picture

Pu-leez.  Here is how this Libor crime will play out.  Since it looks like gvts new about this everybody will agree to a small fine and lawsuits will not be allowed.

Fri, 07/20/2012 - 13:54 | Link to Comment bonddude
bonddude's picture

Or on the real side rumors of a mass all-inclusive institution wide settlement. "see we policed ourselves."

Fri, 07/20/2012 - 14:19 | Link to Comment OneTinSoldier66
OneTinSoldier66's picture

I'm actually hoping that this is the part where the greedy bastards start feasting upon each other, since, I believe, it is getting close to there being no real wealth left to steal/extract via the paper Ponzi Scheme of their creation.

 

The velocity of money here in the U.S. is now at 1960 level lows, even though tremendous amounts of (digital) money have been injected into the paper Ponzi system. Keep stacking and paying down debt, it's working! And it's the right thing to do.

 

As The Money Turns^Not!

Fri, 07/20/2012 - 14:21 | Link to Comment rayduh4life
rayduh4life's picture

vote_, don't forget the part about us muppets picking up the tab.

Fri, 07/20/2012 - 13:41 | Link to Comment Dr. Engali
Dr. Engali's picture

Curiously none of this appeared on CNBC today.

Fri, 07/20/2012 - 13:51 | Link to Comment Yen Cross
Yen Cross's picture

 Dr.E. you're a great poster! CNBS is just pumping IPO's. It's (CNBS), a 24/7 infomercial!

Fri, 07/20/2012 - 14:24 | Link to Comment TheGardener
TheGardener's picture

Singapore being made a scape goat after them announcing full OECD compliance 4 years ago is just another false flag banking attack.

Make no mistake, serious banking in the official sense besides ethnic real relationship banking never deserved
the name, the Swiss being the only serious contenders,
British and American banks making a mock of what banking should be. Making a mock of the safekeeping of money,
being the highly leveraged big mouthed lobbyists they turned
out to be with hindsight

Money and the trading of which being suspended, good riddance of the non-cash economy.

Fri, 07/20/2012 - 14:06 | Link to Comment phalfa5
phalfa5's picture

Santelli is off today

Fri, 07/20/2012 - 13:47 | Link to Comment Snakeeyes
Snakeeyes's picture

Whatever they do, should we switch from LIBOR to EURIBOR? I think so.

http://confoundedinterest.wordpress.com/2012/07/20/libor-swaps-and-euribor-where-we-stand/

Fri, 07/20/2012 - 15:29 | Link to Comment Yen Cross
Yen Cross's picture

 The XAU standard works for me! This is coming from a ccy trader...

  Start a levered bond program/ Ex;  1toz @ FIAT <> currency basket....

Fri, 07/20/2012 - 14:01 | Link to Comment WarPony
WarPony's picture

+1 Mr. Durden.  I prefer the term "global central bankster mafia cartel" - it just has a better ring.

Fri, 07/20/2012 - 14:11 | Link to Comment WillyGroper
WillyGroper's picture

OT. Anyone having tbl w/zh. Error 403
Tried 2 watch video of Sheila hair on why ws not fixed & it was rmvd from ritholtz blog

Fri, 07/20/2012 - 14:27 | Link to Comment tony bonn
tony bonn's picture

now this is reporting you just don't get in the mentrual stream media....oh, i meant to say main stream....

Fri, 07/20/2012 - 14:39 | Link to Comment Nobody For President
Nobody For President's picture

Thanks again Tyler - keep stirring the pot no matter how thick the shit gets - this one goes very deep and very wide, as you well know.

Maybe, just maybe, the MSM will finally pick up on it and alert the sheeple.

Naw...

Fri, 07/20/2012 - 14:52 | Link to Comment Wakanda
Wakanda's picture

Lie More Gate

Fri, 07/20/2012 - 14:57 | Link to Comment max2205
max2205's picture

Ah, making money the old fashion way.....

Fri, 07/20/2012 - 15:32 | Link to Comment ThisIsBob
ThisIsBob's picture

You don't get 2 and 20 for being honest.  Anybody can be honest.

Fri, 07/20/2012 - 19:14 | Link to Comment WallowaMountainMan
WallowaMountainMan's picture

i'm goin back into the wilderness for some piece of mind.

Sat, 07/21/2012 - 00:55 | Link to Comment JimmyCDN
JimmyCDN's picture

Don't worry Mark Carney will get to the bottom of this...

 

http://www.ottawacitizen.com/Business/Money/Carney+says+will+take+issue+...

 

/sarc

Sat, 07/21/2012 - 01:23 | Link to Comment holdbuysell
holdbuysell's picture

The following is a good interview of Ron Paul. He discusses LIBOR and gold manipulation and so calmly and matter-of-factly states that the monetary system is dying and will eventually be replaced--he just accepts it as fact.

http://radio.goldseek.com/nuggets/paul07.17.12.mp3

Sat, 07/21/2012 - 08:46 | Link to Comment antisatan
antisatan's picture

had the most frustrating talk with an ex-Milken investment banker who proceeded to tell me he thought that liborgate benefited the average american.  he then went on to defend Enron.  It was all I could do not to projectile vomit all over his Hermes tie.

Sat, 07/21/2012 - 11:40 | Link to Comment Grand Supercycle
Grand Supercycle's picture

SP500 downleg expected to continue next week onwards.

http://www.zerohedge.com/news/2012-12-24/market-analysis

Do NOT follow this link or you will be banned from the site!