A life ban has been slapped on a former RBS banker after he “recklessly disregarded” the risk of corrupting the Libor benchmark rate’s integrity.
Despite the Financial Conduct Authority waiving the £250,000 fine due to Paul White being in “serious financial hardship”, the regulator has prohibited him from performing any function relating to regulated financial activity.
White worked for the Royal Bank of Scotland as the primary submitter for Japanese yen and Swiss franc Libor between 8 March 2007 and 24 November 2010.
The FCA found he had allowed his submissions to be set by those with “collateral” financial interests in the outcome.
This follows three other occassions where the FCA has taken public action against a trader for manipulating Libor submissions, and follows a string of fines and bans for Libor compliance failures.
To date the financial watchdog has imposed seven fines, totalling £426m, on firms for misconduct relating to Libor.
Mark Steward, director of enforcement and market oversight at the FCA said White had an obligation to ensure the submissions he made were proper ones, and said he “recklessly disregarded” the obvious risks.
White received 68 documented communications from derivatives traders requesting submissions that would benefit their trading positions, including requests received from brokers on behalf of an external Japanese derivatives trader.
For example, on 22 June 2010 Mr White engaged in a Bloomberg communication with an external broker as follows:
External Broker: “u got a bit less emotion in the 3’s fix [JPY] today?”
White: “unchanged should be the call, u want higher?”
External Broker: “yah, if not a msve prob”
White: “will c what we can do, maybe up a pip”
External Broker: “nice, much appreciated.”
He also sat next to a Swiss franc derivatives trader who had asked him to make Swiss franc Libor submissions to him on a weekly basis.
White submitted these rates to the British Bankers’ Association.
Mr Steward said: “This ban should reinforce the message that working in financial markets entails obligations and responsibilities and that serious failures will result in substantial penalties including fines and prohibitions.”
The FCA had already issued a warning on 18 June 2014, but proceedings were frozen until a criminal investigation by the Serious Fraud Office into former employees at RBS had concluded.