Citigroup Promotes Banker Who Hayes Said Knew of Libor Rigging

By Patrick Gower, Gavin Finch
November 20, 2015 12:58 PM

Citigroup Inc. promoted an executive who Tom Hayes, a former colleague who is now a convicted felon, has repeatedly said was aware of Libor manipulation, according to two people with knowledge of the situation.

Brian McCappin, who once ran Citigroup’s Japanese investment bank, was named co-head of institutional sales for the New York-based bank’s foreign exchange business in September, said one of the people, who declined to be identified as details of his appointment haven’t been made public.

Ex-Citigroup and UBS Group AG derivatives trader Hayes, who was sentenced to 14 years in jail for conspiracy to rig yen Libor in August, testified during his trial that McCappin knew about his attempts to move the London interbank offered rate. McCappin, who was chief executive officer of Citigroup’s Japanese investment bank at the time, hasn’t been accused of wrongdoing by prosecutors.

~Snip~

McCappin, who now works in New York, didn’t respond to voicemails on his work and mobile phones, as well as his e-mail, seeking comment. He wasn’t called to testify at the Hayes trial earlier this year.

~Snip~

Prosecutors in London said during a nine-week trial that Hayes was the “ringmaster” of a global network of 25 traders and brokers from at least 10 firms who tried to manipulate Libor, used to price more than $350 trillion of financial contracts from mortgages to credit cards and student loans..

Read more:
http://finance.yahoo.com/news/citigroup-promotes-banker-hayes-said-175814593.html

Everything Is Rigged: The Biggest Price-Fixing Scandal Ever

BY MATT TAIBBI April 25, 2013

~Snip~

Yet despite so many instances of at least attempted manipulation, the banks mostly skated. Barclays got off with a relatively minor fine in the $450 million range, UBS was stuck with $1.5 billion in penalties, and RBS was forced to give up $615 million. Apart from a few low-level flunkies overseas, no individual involved in this scam that impacted nearly everyone in the industrialized world was even threatened with criminal prosecution.

Two of America's top law-enforcement officials, Attorney General Eric Holder and former Justice Department Criminal Division chief Lanny Breuer, confessed that it's dangerous to prosecute offending banks because they are simply too big. Making arrests, they say, might lead to "collateral consequences" in the economy.

The relatively small sums of money extracted in these settlements did not go toward reparations for the cities, towns and other victims who lost money due to Libor manipulation. Instead, it flowed mindlessly into government coffers. So it was left to towns and cities like Baltimore (which lost money due to fluctuations in their municipal investments caused by Libor movements), pensions like the New Britain, Connecticut, Firefighters' and Police Benefit Fund, and other foundations – and even individuals (billionaire real-estate developer Sheldon Solow, who filed his own suit in February, claims that his company lost $450 million because of Libor manipulation) – to sue the banks for damages.


~Snip~


The presence of Covington & Burling in the suit – representing, of all companies, Citigroup, the former employer of current Treasury Secretary Jack Lew – was particularly galling. Right as the Libor case was being dismissed, the firm had hired none other than Lanny Breuer, the same Lanny Breuer who, just a few months before, was the assistant attorney general who had balked at criminally prosecuting UBS over Libor because, he said, "Our goal here is not to destroy a major financial institution."

Read more:
http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425

LIBOR Scandal: The Crime of the Century?

By Christopher Matthews - July 09, 2012

The 21st has been a banner century for financial and accounting scandals. Enron, the dotcom bust, the subprime-mortgage crisis and the bank bailouts have all contributed to the very low esteem in which the American public holds Corporate America in general, and high finance in particular. So it is no small feat that the latest interest-rate-fixing LIBOR scandal is being heralded as the most egregious in a generation or, as Robert Scheer put it in the Nation, “the crime of the century.”


LIBOR is an acronym for the London interbank offered rate, and it is the average interest rate the world’s largest banks pay when they borrow money. And this figure (or figures, as different LIBORs are calculated for different loan maturities and currencies) is used to price hundreds of trillions of dollars worth of financial instruments, from high-yield corporate debt to student loans.

(MORE: Big Banks Accused of Manipulating Key Interest Rates)


Considering the importance of this benchmark rate and the financial industry’s recent track record, it is no wonder that many in the press are up in arms about Barclays’ recent admission that it intentionally submitted false rates in order to manipulate LIBOR for its own gain. Barclays has been fined more than $450 million by British and American regulators, but it is by no means the only bank thought to have deceptively tried to influence LIBOR — thus the outrage expressed this past week in the media.

Read more:
http://business.time.com/2012/07/09/libor-scandal-the-crime-of-the-century/

Insight: Top Justice officials connected to mortgage banks

By Scot J. Paltrow - Fri Jan 20, 2012 9:31am EST

U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department's criminal division, were partners for years at a Washington law firm that represented a Who's Who of big banks and other companies at the center of alleged foreclosure fraud, a Reuters inquiry shows.

The firm, Covington & Burling, is one of Washington's biggest white shoe law firms. Law professors and other federal ethics experts said that federal conflict of interest rules required Holder and Breuer to recuse themselves from any Justice Department decisions relating to law firm clients they personally had done work for.

Both the Justice Department and Covington declined to say if either official had personally worked on matters for the big mortgage industry clients. Justice Department spokeswoman Tracy Schmaler said Holder and Breuer had complied fully with conflict of interest regulations, but she declined to say if they had recused themselves from any matters related to the former clients

Reuters reported in December that under Holder and Breuer, the Justice Department hasn't brought any criminal cases against big banks or other companies involved in mortgage servicing, even though copious evidence has surfaced of apparent criminal violations in foreclosure cases.

~Snip~

There also is evidence of almost routine manufacturing of false mortgage assignments, documents that transfer ownership of mortgages between banks or to groups of investors. In foreclosure actions in courts mortgage assignments are required to show that a bank has the legal right to foreclose.

In an interview in late 2011, Raymond Brescia, a visiting professor at Yale Law School who has written about foreclosure practices said, "I think it's difficult to find a fraud of this size on the U.S. court system in U.S. history."


Read more at Reutershttp://www.reuters.com/article/2012/01/20/us-usa-holder-mortgage-idUSTRE80J0PH20120120#FJ4spQLCTVX0Utdh.99