7th Jan 2014 06:27
LONDON (Alliance News) - RBS Securities Japan Ltd, a subsidiary of Royal Bank of Scotland PLC, was Monday sentenced in the US for its role in manipulating the Japanese Yen London interbank offered rate.
The Japanese investment banking operation was sentenced by US District Judge Michael P. Shea in the District of Connecticut after pleading guilty in April to one count of wire fraud for its role in rigging Yen Libor benchmark interest rates.
RBS's sentencing comes almost a year after RBS Securities Japan agreed to plead guilty in connection with the manipulation of the rate, which is used as a benchmark for hundreds of trillions of dollars' worth of financial contracts the world over.
RBS Securities Japan signed a plea agreement with the government in which it admitted its criminal conduct and agreed to pay a USD50 million fine, which the court accepted in imposing sentence, according to a US Justice Department statement.
In addition, RBS PLC entered into a deferred prosecution agreement requiring the payment of a further USD100 million penalty, to admit and accept responsibility for its misconduct and to continue cooperating with the Justice Department in its ongoing investigation.
The combined USD150 million makes up part of the approximate USD612 million in fines and penalties the bank must pay to US and UK regulators.
"Today?s sentencing of RBS is an important reminder of the significant consequences facing banks that deliberately manipulate financial benchmark rates, and it represents one of the numerous enforcement actions taken by the Justice Department in our ongoing Libor investigation," Acting Assistant Attorney General Raman said in a statement.
"As a result of the department?s investigation, we have charged five individuals and secured admissions of criminal wrongdoing by four major financial institutions. Our enforcement actions have had a lasting impact on the global banking system, and we intend to continue to vigorously investigate and prosecute the manipulation of this cornerstone benchmark rate," the Acting Assistant Attorney General added.
On December 4 2013 RBS was fined EUR391 million by the European Commission for its role in manipulating interest rate benchmarks.
RBS paid EUR 260.1 million as a settlement for Yen Libor and EUR131 million for Euribor.
Benchmark rates had faced questions about their accuracy during the 2008 financial crisis, but the scandal reached full force in 2012 when Barclays became the first to settle a fine for attempting to falsify the Libor benchmark.
By Samuel Agini; [email protected]; @samuelagini
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