“There is no information-sharing among banks unlike the past 15 years of federal investigations.”
~Lawyer representing one of the banks
The LIBOR scandal is the largest banking scandal in history. And now that they’ve been caught red handed …banks are scrambling for cover. Unlike in the past where banks would rally together to defend their case as a group … all of these banks are fighting for their own hides individually. And this is forcing these banks to roll over on one another. The Department of Justice and the Obama administration are implementing a divide and conquer strategy and it’s working.
Even better … the DOJ is pursuing criminal cases against two banks with various traders etc and it is believed that they may have proof top executives were involved in the interest rate manipulation. If you don’t know about the LIBOR scandal – read our articles HERE.
The NY Times writes HERE:
With billions of dollars and their reputations on the line, financial institutions have been spreading the blame in recent meetings with authorities, according to government and bank officials with knowledge of the matter. While acknowledging their own wrongdoing, institutions are pointing out actions at other banks that they believe are worse — and in some cases, extend to top executives.
Interviews with dozens of government and bank officials who spoke on the condition of anonymity because the investigation is developing, and a review of court documents and regulatory filings show varying degrees of exposure. Banks like UBS, Deutsche Bank and Citigroup uncovered that employees had worked with traders at other firms to influence rates, according to government and bank officials. A small number of institutions, including Credit Suisse and Bank of America, found more limited actions.
The extent of the evidence has created an every-bank-for-itself attitude.
Other cases are expected to follow. The Justice Department is aiming to file criminal actions against two banks before the end of the year and is preparing to arrest former traders at Barclays and other banks, according to government officials. In addition, state attorneys general and local district attorneys have approached the Justice Department in recent weeks, seeking a role in the case.
Business Week is reporting that Bank of America is receiving subpoenas relating to the LIBOR probe HERE:
The bank received subpoenas and requests for information from the U.S. Department of Justice, Commodity Futures Trading Commission and U.K. Financial Services Authority, the firm said yesterday in a filing. Bank of America also said regulators have asked whether the company properly oversaw vendors who sold identity-theft protection products to its customers.
Inquiries involve “submissions made by panel banks in connection with the setting of London interbank offered rates and European and other interbank offered rates,” Charlotte, North Carolina-based Bank of America said in the filing
I like the way Dennis Kelleher explained the process that he would recommend the DOJ take in order to put asses in jail:
“Slapping handcuffs on these traders has to be the next step … handcuffs, squeeze them, handcuffs, squeeze them and move up the chain…. This is an open and shut case….This is egregious criminal conduct….There’s never been any accountability on Wall Street. Wall Street’s a high-crime area and the criminals are just let to run free. This would never be tolerated anywhere else in America, and it’s time to end the two sets of laws. We apply [one set of] laws to everybody in this country and we pamper Wall Street.”
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