You are here

RBS traders boasted of LIBOR 'cartel'

Section: Daily Dispatches

By Steven Swinford and Harry Wilson
The Telegraph, London
Wednesday, September 26, 2012

Senior traders at Royal Bank of Scotland boasted about operating a “cartel” that made “amazing” amounts of money by rigging interest rates, it has been disclosed.

Internal messages revealed in court documents apparently show how traders claimed they could manipulate Libor, which is used to set borrowing costs for millions of businesses, consumers, and investors.

The messages, some sent just months before the taxpayer was forced to bail out RBS at a cost of more than L40 billion, suggest the practice was condoned and encouraged by senior executives at the bank, and have now dragged the taxpayer-backed lender to the heart of the Libor scandal.

... Dispatch continues below ...


Prophecy Platinum Intercepts Best Pt+Pd+Au Grades Yet
at Wellgreen Project in Yukon Territory: 5.36 g/t

Company Press Release
Tuesday, September 11, 2012

VANCOUVER, British Columbia -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) announces more results of its 2012 drill program on the company's fully-owned Wellgreen platinum group metals, nickel, and copper project in southwestern Yukon Territory, Canada. Four surface holes and four underground holes all intercepted significant mineralized widths, ranging from 28.5 meters (WS12-201) and up to 459.5 metres (WS12-193). Highlights include WU12-540, which returned 8.9 metres of 5.36 grams per tonne platinum, palladium, and gold; 1.73 percent copper; and 1.01 percent nickel within 304.5 meters of 0.66 g/t platinum-palladium-gold, 0.20 percent copper, and 0.27 percent nickel.

The surface drill program started in June and has completed 16 holes (assays pending for 12 holes) with two rigs now on site. The surface program continues to progress at a steady pace.

Prophecy Chairman John Lee commented: “Wellgreen is a very large nickel, copper, and platinum group metals project with near-surface high-grade zones. High-grade intercepts will be incorporated into resource modeling and mine planning in the pre-feasibility study. We expect further positive drill results from Wellgreen shortly.”

Wellgreen features a low 2.59-to-1 strip ratio, is situated at an altitude of 1,300 meters, and is only 15 kilometers from the two-lane paved Alaska Highway. Those factors significantly minimize the project's indirect costs.

For the complete company statement with full tabulation of the drilling results, please visit:

MPs have warned that the scale of RBS's involvement in the scandal means it could face an even bigger fine than Barclays, which paid a record L290 million in July after admitting attempting to manipulate Libor. The bank could also be hit with billions of pounds in damage claims.

Tan Chi Min, a former senior trader at RBS's global banking and markets division in Singapore, has alleged that managers "condoned collusion" between staff to maximise profits by rigging Libor.

Mr Tan, who worked for RBS from August 2006 to November 2011, was eventually sacked for gross misconduct, but claims the bank made him a "scapegoat" for malpractice condoned by managers.

A 231-page affidavit filed by Mr Tan at the Singapore High Court, obtained by Bloomberg, includes alleged transcripts of instant messages from RBS traders and executives.

On August 19, 2007, Mr Tan sent a trader based at Deutsche Bank a message. "It's just amazing how Libor-fixing can make you that much money or lose it if opposite," he wrote. "It is a cartel now in London."

A day later Mr Tan sent a message to Scott Nygaard, global head of RBS's London treasury markets. "We want high fix in 3s," a reference to three-month interbank lending, Mr Tan wrote. "Neil is the one setting the yen Libor in London now and for this week and the next." Mr Nygaard replied: "Go Neil, hahahahaha."

On August 21, 2007, Jerzi Mohideen, another senior banker working for RBS in Singapore, wrote: "What's the call on Libor?"

Neil Danziger, a trader who has since been sacked by RBS, allegedly sent a message asking: "Where would you like it, Libor that is?"

Another trader wrote: "Mixed feelings, but mostly I'd like it lower so the world starts to make a little sense." Mr Danziger replied: "OK, I will move the curve down 1 basis point, maybe more if I can."

Mr Danziger declined to comment.

On April 2, 2008, Mr Tan said: "Nice Libor, our six-month fixing moved the entire fixing, hahahah."

The Serious Fraud Office is considering whether to bring criminal proceedings against individuals found to be involved, while regulators in the UK and US are also conducting investigations. This week, Stephen Hester, chief executive of RBS, who joined the bank in October 2008 following its bailout, said he expected the fines and legal claims related to scandals such as Libor to cost the bank "a lot of money."

A spokesman for RBS said: "Our investigations into submissions, communications, and procedures relating to the setting of Libor and other interest rates are ongoing. RBS and its employees continue to cooperate fully with regulators."

Mr Nybaarg and Mr Mohideen, who are both still employed by RBS, declined to comment.

RBS is among several of the world's biggest banks being investigated over their role in fixing the Libor rate. The issue has prompted renewed calls for an overhaul of the banks.

Martin Wheatley, head of financial conduct at the Financial Services Authority, will on Friday publish his proposals on ways to reform Libor to prevent it from being manipulated. Mr Wheatley is expected to recommend that responsibility for Libor is taken away from the British Bankers Association, which has seen its role in the oversight of the rate heavily criticised.

John Mann, a Labour MP on the Treasury Select Committee, said: "The situation at RBS was even worse than Barclays. This is potentially significant criminal activity and there needs to be a full police investigation."

* * *

Join GATA here:

New Orleans Investment Conference
Wednesday-Saturday, October 24-27, 2012
Hilton New Orleans Riverside Hotel
New Orleans, Louisiana

* * *

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

Or by purchasing a colorful GATA T-shirt:

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

To contribute to GATA, please visit:


GoldMoney adds Toronto vaulting option

In addition to its precious metals storage facilities in Hong Kong, Switzerland, and the United Kingdom, GoldMoney customers now can store their gold and silver in a high-security vault operated by Brink's in Toronto, Ontario, Canada.

GoldMoney also has recently partnered with Rhenus Freight Logistics to offer another gold storage option in Switzerland. The Rhenus vault is in the secured zone of Zurich Airport and offers customers superb security as well as the ability to inspect their gold.

Storage at the new vaults in Canada and Switzerland is available at GoldMoney's lowest fees. Customers can select their storage location when placing their buy order.

GoldMoney customers can take delivery of any number of gold, silver, platinum, and palladium bars from any GoldMoney vault, as well as personally collect their bars stored in the Hong Kong, Switzerland, and U.K. vaults.

It's easy to open an account, add funds, and liquidate your investment. For more information, visit: