Barclays fined $3.75m as 10 years of incriminating LIBOR chat messages “disappear”

On Thursday 27 December it was reported by Reuters that Barclays “accidentally lost” 10 years of instant chat message data, over the period LIBOR was known to be rigged, killing off any serious hopes of a prosecution for USD LIBOR manipulation.

Financial campaigners have questioned whether investigations into LIBOR would confirm the presence of cartel like activity in currencies other than Japanese Yen, to which previous fines levelled against RBS, UBS, Barclays and ICAP relate.

LIBOR is set in 16 currencies. The top 5 traded currencies by volume being USD, Euro, JPY, Stirling, and AUD.

With 16 globally traded LIBOR currencies, even 18 months after the first Barclays fine of June 2012, according to regulators only evidence of Yen manipulation has been uncovered. All of the UK and EU based charges against largely UK and EU banks have been curiously restricted to Japanese Yen LIBOR.

Despite beings the worlds’ number 1 traded currency, we are yet to see prosecution for US LIBOR manipulation, nor US trading banks.

Back in September, when ICAP, who remain under investigation for ISDAfix manipulation were fined for rigging LIBOR – I asked Rolling Stone financial editor Matt Taibbi for his views on broader LIBOR currency manipulation.

Taibbi_LIBOR_2013-12-28 00.05.32

On 27th May 2008, Timothy Geithner’s US Treasury office identified concerns to the Bank of England regarding deliberate misreporting of LIBOR, recommending greater transparency with respect to “the financial relationships between the BBA and panel banks, and around the BBA’s financial interests in LIBOR”

They then questioned the composition of the US dollar LIBOR rate setting panel, before making further suggestions about how USD LIBOR could be calculated to be more appropriate to participants in SWAPS and other financial markets.

Further email exchanges between Paul Tucker at the Bank of England and Barclays note visible discrepancies between USD and Sterling LIBOR movements.

Financial commentator Mark Gongloff revealed that US Treasury Secretary, Timothy Geithner knew LIBOR was rigged when the US FED bailed out AIG in 2009. Tim Geithner noted:

Government had no choice during the financial crisis but to lend to banks and AIG using an interest rate, Libor, that everybody knew was flawed.

Crucially, comments from Geithner suggest that the US Treasury was also concerned about misreporting and manipulation in US dollar LIBOR.

The fact we are yet to see prosecution(s) of banks by US or UK regulators for manipulation of US dollar LIBOR poses serious questions as to whether Barclays loss of instant message chat data is a one off event, or part of a larger trend of US regulatory failure across US LIBOR setting panel banks that potentially spills over into other currencies including the Stirling and Euro.

Could be time to check back in with Matt Taibbi for an update…

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6 comments on “Barclays fined $3.75m as 10 years of incriminating LIBOR chat messages “disappear”
  1. Useless Eater says:

    Don’t sweat it, Barclays. In fact, everyone knows where every last email sent in the last twenty years in the entire world from everybody who ever sent one is, has been, and forever will be.

    With the Snowden Revelations, convenience of lost communications is a thing of the past. Isn’t that wonderful news, Barclays?

    Sorry. Can’t use that excuse anymore, even when something fishy occurs. Welcome to the nightmare of your own reckoning. The CFTC, the SEC, the CME or whatever other “regulatory commission” or international court you can think of may play along with your silly hide and seek games, but there are others, I am sure, who cannot help but to blow a whistle or two. There is blood in the water and the sharks are circling. When there is cheap money to be made by blowing whistles, the whistles will be a-blowin’. Some sort of Law of Greed or somethin’, I believe. You can’t buy everyone off, especially when you never know where the next blow is coming from.

  2. Bruce 2 says:

    No need to worry about lost chat transcripts.

    ▶ Calling NSA (part 1) – YouTube

  3. Al says:

    You western zombies are being raped. But you do nothing. Maybe you are all masochists, like abuse, eh?

    Living in a fraud, living, breathing, ingesting lies 24/7.

    How about a move, some “actions”, little western boys and girls….?

  4. Nat says:

    What are these instant chat messages? An internal system? Must an internal one else they wouldn’t be holding the records.. So no NSA here…

    We tend to see these banks as entire entities in themselves “Barclays has lost evidence” but the sad thing is it is some schmuk IT who has made this happen, some “just doing what I’m told, afraid to loose my job” type.

    I met someone once in 2008 who said, in the polite conversation, that he had just left uni and got a job with Merril Lynch (or Moragn Stanley, one that has headquarters in west London). I started going on about the recent bail-outs and criminality and he just outright told me that one of the things he had to do at his new job was maintain a third line of communication, email system etc that was hidden from the regulators.

    Just seemed to accept that it was something he had to do at his new job, but with a sigh..

  5. chiller says:

    @Al
    You first must have something to lose it…which you obviously don’t.
    But we’re flattered you’re so concerned about us…we, on the other hand, care nothing for you. Enjoy 3rd world living do ya? Good…because that’s exactly where you will live out the rest of your miserable life…in 3rd world hell.

  6. hedgehunter says:

    SCREW fines! All paid in unaudited phoney fiat virtual MONOPOLY “money” ledger adjustments… JAIL’EM for their “capital” crimes!

    Pretty funny they rant about bitcoin being virtual as if the crappy fiat they’re driving had any wheels on it!

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