Three British men arrested in UK Libor probe
By Kirstin Ridley and Katharina Bart | December 12, 2012 3:42 AM EST
Three British men were detained in London on Tuesday in the first arrests stemming from a global investigation into the manipulation of interbank lending rates.
One of those arrested was former Citigroup and UBS trader Thomas Hayes, according to a source familiar with the situation. Hayes could not immediately be reached for comment and the identity of the others could not be determined by Reuters.
Prosecutors and regulators across Europe, the United States, Canada and Japan have been investigating how traders attempted to rig key benchmark lending rates such as Libor (London interbank offered rate).
Dozens of people have been fired or suspended and are now under investigation in the probe into the benchmarks, but the arrests were the first since the U.S. Commodity Futures Trading Commission initiated an industry-wide probe in October 2008.
Britain's Serious Fraud Office (SFO) said three men, aged 33, 41 and 47, had been taken to a London police station in the early morning after three properties were searched.
"The men are all British nationals currently living in the United Kingdom," the SFO said. A spokesman said interviews were continuing. Police can hold people for 24 hours without charge.
Designed originally in the late 1960s to estimate the costs at which banks will lend to each other, Libor has become the key benchmark for around $550 trillion of loans and financial contracts.
According to the Canadian Competition Bureau, Hayes and other traders are alleged to have manipulated yen Libor, the average interbank interest rate at which banks are prepared to lend one another unsecured funds denominated in Japanese yen.
Hayes worked at Swiss bank UBS from 2006-09 and then at U.S. bank Citigroup until 2010.
The arrests mark a ratcheting up of the sprawling investigation since Barclays admitted in June that its traders had tried to manipulate Libor and its euro cousin Euribor from 2005 through 2009 and that the bank had low-balled rates during the 2007/08 credit crunch.
The British bank reached a $450 million settlement with U.S. and UK regulators.
Switzerland's UBS and Britain's RBS are expected to reach similar financial settlements shortly. More than a dozen banks are being investigated.
Spokespeople for UBS, Barclays and RBS declined to comment on the arrests. Police referred all questions to the SFO.
(Additional reporting by Matt Scuffham; Editing by Matthew Tostevin)
Most Popular Slideshows
- Kristen Stewart Moving On With Nicholas Hoult, Jennifer Lawrence Dating Chris Martin – Reports [PHOTOS]
- Chris Martin Dating Reports: Jennifer Lawrence Vs Gwyneth Paltrow [PHOTOS]
- Kate Middleton Suffocated in Kensington Palace, Queen Elizabeth Reported War With The Duchess [PHOTOS]
- 2014 MTV Video Music Awards: Everything To Know [PHOTOS]
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Saudi Arabia: Brothers Beheaded For Smuggling Marijuana Into The Kingdom
- ISIS: More Journalists Beheading To Come After James Foley and Steven Sotloff [Video]
- ISIS Posts Graphic Beheading Video of US Journalist James Foley
- Moto X+1 is Likely Nexus 6 Template; Motorola Shamu is 1st Android Silver with Snapdragon 810 – Reports
- James Foley’s Executioner Has British Accent—A Chilling Reminder That ISIS Has Foreign Members
- Nexus 6 Release Date Dilemma with Motorola Shamu Details Pointing to Better Smartphone and Killer Features
- After James Foley, ISIL Threatens to Behead Another American Journalist Steven Sotloff