Three former traders at an international Dutch bank were charged by the U.S. Justice Department with fraud in connection with their supposed manipulation of the London interbank offered rate, or LIBOR—the key benchmark in setting lending costs between banks, and a reference rate for numerous financial instruments.
The traders were charged Monday with two counts of wire fraud and and one count of conspiracy to commit wire fraud after investigators said they found emails the bankers had exchanged messages to fudge interest rates up or down to make more money, the Wall Street Journal reports. One of the traders allegedly emailed a second in 2006 and asked him to “sneak your 3m libor down a cheeky 1 or 2 bp”—(move the three-month lending rate down one or two basis points, or hundredths of a percentage point). He added, “it will make a bit of diff for me.”
Eight people have now been criminally charged as part of the investigation into the manipulation of interbank interest rates, and four banks have settled with the Justice Department.
Neither the traders, nor the Dutch bank, Rabobank Group NV, have commented yet.