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FCPA Blog Daily News

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Monday
Mar072016

UK bans former Deutsche Bank trader for LIBOR fraud

The UK Financial Conduct Authority Wednesday banned a former trader at Deutsche Bank AG from the UK financial services industry for "lacking honesty and integrity" following his guilty plea for fraud in the United States.

Michael Ross Curtler pleaded guilty in October 2015 in federal court in New York City for his role in a conspiracy to manipulate Deutsche’s U.S. Dollar LIBOR submissions.

Mark Steward, director of enforcement and market oversight at the Financial Conduct Authority or FCA, said Curtler has admitted "engaging in dishonest conduct in making USD LIBOR submissions. Dishonesty must disqualify him from UK financial services."

LIBOR -- the London Interbank Offered Rate -- is critical to financial markets. A huge number of investments and trades are linked to LIBOR, including some commercial and consumer loans, savings rates, and mortgages.

The FCA has fined eight firms a total of £758.4 million ($1.07 billion) for misconduct relating to LIBOR.

It previously banned two individuals for LIBOR offenses -- Lee Stewart and Paul Robson.

In January, a jury in London acquitted six defendants of manipulating LIBOR. 

The Serious Fraud Office alleged that all six conspired with Tom Hayes to influence the submissions of panel banks in the Yen LIBOR setting process.

Hayes -- a former derivatives trader at UBS and Citigroup -- was convicted after a trial last year and sentenced to 14 years in prison. An appeals court later reduced his sentence to nine years.

The SFO charged a total of 19 defendants in the case. Some are still awaiting trial.

In the United States last year, a federal jury in Manhattan convicted two former London traders for Rabobank of rigging LIBOR.

Anthony Allen and Anthony Conti, both UK citizens, face up to 30 years in prison.

The FCA said Wednesday that Curtler worked for Deutsche between 1993 and December 2012.

From 2000 to 2012, he traded several financial instruments tied to USD LIBOR. He sometimes made Deutsche’s USD LIBOR submissions.

The submissions were supposed to reflect only the rate at which Deutsche "perceived it could borrow USDs in the London interbank market."

Other Deutsche traders asked Curtler to alter his USD LIBOR submissions to benefit their trading positions and the individual traders.

The FCA said,

Mr Curtler made alterations to the USD LIBOR submissions consistent with these requests. Mr Curtler also solicited requests from traders and changed his USD LIBOR submissions accordingly.

Curtler is now waiting to be sentenced in the United States. He faces up to 30 years in prison. 

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.