The Risk Universe is a website and a monthly digital magazine that seeks to shed some much needed illumination onto the world of operational risk management.

Special Alert : The untouchables
The Libor scandal continues to provide fresh headline fodder five years after the Treasury Select Committee’s inquiry. This month, a secret recording – apparently of Barclays senior executive Mark Dearlove and now-jailed Libor submitter, Peter Johnson – has raised new questions over senior management’s role in rate rigging.

For financial journalists, Libor is the gift that just keeps on giving. But behind the headlines and the eye-watering fines, we mustn’t forget the individuals who have paid the biggest price of all.

Yes, the bankers found guilty of benchmark manipulation broke the law. But were they really the driving force behind this systematic and widespread misconduct, or were they simply acting on instruction?

More and more evidence is pointing towards senior executives playing a pivotal role in the manipulation of Libor rates, telling their subordinates to submit dishonest calculations to the BBA. And yet, of the 19 individuals charged by the Serious Fraud Office over Libor and Euribor, none have been from senior management.

Even the Bank of England, on which we have relied to provide oversight and to shape a more sustainable and honest culture in the financial industry since the crisis, appears to have been pressuring banks into making false submissions.

Is it fair that Peter Johnson, who – if we believe the recording is genuine – followed orders from his superior Mark Dearlove, is now serving a four-year jail sentence while Dearlove enters his 20th year at Barclays? Is it fair that for the last eight years, Stylianos Contogoulas and Ryan Reich have been fighting to clear their names; or that Tom Hayes, the so-called “ring leader”, received a jail sentence not much shorter than some people are given for murder?

It seems it’s fine to break the law, manipulate subordinates into doing the same and then push the blame onto others – just so long as you are at the top, high enough up where the long arm of the law can’t quite reach you.




Latest News

AIB fined for breaching AML rules

The Central Bank of Ireland has fined Allied Irish Banks (AIB) €2.275m and reprimanded it for six breaches of the Criminal Justice Money Laundering & Terrorist Financing Act, 2010 (CJA).

SEC charges risk management vice president with insider trading

The Securities and Exchange Commission (SEC) has charged a vice president in the risk management department of a New York-based investment bank with insider trading on confidential information he learned in advance of a private equity firm’s acquisition of a publicly-traded technology company.

Former Chinese exchange official fined US$36m

A former Chinese stock market official has been fined US$36m by regulators for illegal stock trading activity.

Deutsche Bank fined US$156.6m for forex violations

The Federal Reserve has announced two enforcement actions against Deutsche Bank that will require the firm to pay a combined US$156.6m in civil money penalties. The bank will pay a US$136.9m fine for unsafe and unsound practices in the foreign exchange markets, as well as a US$19.7m fine for failure to maintain an adequate Volcker rule compliance programme prior to March 30, 2016.

Ex-Merrill Lynch broker pleads guilty to US$8.7m fraud

An ex-Merrill Lynch broker has pleaded guilty to bank fraud in a scheme that went undiscovered for almost 15 years.

Accountant gets 32 months for £200k fraud at LME

A former head of the accounting department at the London Metal Exchange (LME) has been jailed for 32 months for committing £200,000 worth of fraud.

Bomb explodes outside bank in Athens

An explosion occurred last night at 10.38pm outside an Athens branch of Eurobank, Reuters reports.

UBS penalised for sitting on price-sensitive information

UBS has been fined by the Swiss stock exchange (Six) for failing to share price-sensitive information with the market in 2012.

Raymond James to pay US$150m settlement in ski resort lawsuit

Wealth management firm Raymond James will pay US$150m to draw a line under allegations it enabled a fraudulent scheme via a Vermont ski resort and a number of other, related businesses.

Swift and EastNets deny hacker claims

Swift and EastNets have denied reports their networks were compromised by the US National Security Agency (NSA).

Simple bank forced to ask customers to close and reapply for accounts

US digital bank Simple has been forced to ask customers to reapply for their accounts due to a “clumsy” transition over to its new owner, BBVA Compass.

Brazil's Odebrecht fined US$2.6bn for corruption

Brazilian engineering firm Odebrecht has been fined US$2.6bn for corruption involving scandal-ridden state oil company, Petrobras.

 
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