RBS Fined $612M for Manipulating Libor Rate

Royal Bank of Scotland Group Plc Britain’s biggest publicly owned lender, will pay about $612 million in fines for manipulating interest rates, the second- largest penalty imposed in a global regulatory probe.

The lender will pay $325 million to the U.S. Commodity Futures Trading Commission, $150 million to the Department of Justice and 87.5 million pounds ($137 million) to the U.K.’s Financial Services Authority, the CFTC said in a statement today. RBS said it will recoup about 300 million pounds to pay the fines by cutting bonuses and clawing back previous awards. The bank’s Japanese unit agreed to plead guilty to wire fraud as part of a deal with the U.S. Justice Department, the CFTC said.

“The public is deprived of an honest benchmark interest rate when a group of traders sits around a desk for years falsely spinning their bank’s Libor submissions, trying to manufacture winning trades,” said David Meister, the CFTC’s director of enforcement. “That’s what happened at RBS.”

The penalty is the biggest blow to Chief Executive Officer Stephen Hester’s attempt to overhaul the lender after it took 45.5 billion pounds from taxpayers in the largest bank bailout in history in 2008. The fine, the third to result from the global probe so far, exceeds the 290 million pounds Barclays Plc paid in June, and is second only to the $1.5 billion Switzerland’s UBS AG paid in December.

Bloomberg

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