I assume that there’s someone somewhere whose job it is to think about this, but the big Libor fine that appears to be in UBS’s future got me wondering: how do they decide how big these fines are supposed to be? In most fraud cases you can tot up how much someone stole and use that as a starting point, inflating or deflating it for different levels of evil or remorse. But that doesn’t seem to be a promising avenue in Liborgate, where the money involved is hard to calculate and mostly flowed around the manipulating banks without touching them directly. The fine-setters seem to have about four things to think about:
- how much bad stuff did the bank do,
- how much money did they make doing it,
- how caught are they, and
- how sorry are they now.
On how much bad stuff … really the point of these settlements is that you’ll never quite know. The Barclays settlement documents contain tons of delightful emails, but they’re framed by the usual prosecutorial boasting that they are “just some examples of the numerous trader requests over the years in question.” They’re a sampling thrown in for scandalous effect, not a real accounting of Barclays’ rate manipulation. For the CFTC to actually publish every instance that it discovered of rate-fixing, in a settlement, would be silly. For one thing, the settlement is designed to avoid the necessity of doing the work to get such an accounting. For another, the settlement is designed to avoid the public release of such an accounting, which would be ammunition for the private lawsuits that have sprung up around Libor.
So we’re unlikely to get a real official read on whether UBS was worse than Barclays and by how much. But the fine is obviously a clue that they were pretty bad. From David Merkel’s data they actually seem to have been middle-of-the-pack as a Libor submitter, without the extreme submissions and big swings that Barclays had. But to be fair that is in 3-month USD and part of UBS’s thing seems to have been manipulating Libor in more tenors and currencies than Barclays did. Read more »
Earlier this month, it was reported that Barclays’ investment bank chief Rich Ricci was working on a little something called Project Mango,* which is similar to Bank of America’s Project New BAC in that one aspect of it involves firing a bunch of people, as part of a plan to revamp the unit. According to the Journal, management is now putting the finishing touches on Project M and all that is left to decide is whether cutting 2,000 IBD jobs is enough or if they should think bigger. Read more »
Remember when Bank of America said it was working on a little something called “Project New BAC,” and it involved firing a whole bunch of employees? Barclays is apparently working on a coupla “projects” of its own. Read more »
Barclays Has Fired All The Employees Involved In Libor Manipulation That Didn’t Slip Out A Side Door And Beat Them To The PunchBy Bess Levin
Barclays has fired five employees following its internal investigation of the rigging of Libor interest rates and disciplined another eight people, the head of its investment bank said on Wednesday. Rich Ricci, chief executive of Barclays’ corporate and investment banking, said “a lot” of the individuals identified in its internal probe had left the bank so it could not take action against them. [Reuters]
Is there a better word in the English language than “monetize”?1 When you have a thing, and you would rather have money than that thing, you have about two choices, which are:
- sell the thing, or
- monetize the thing.
Qatar has cashed in its remaining warrants in Britain’s Barclays Plc, a move that should yield a $280 million profit and still leaves the sovereign wealth fund as the bank’s top shareholder following a controversial fundraising in 2008.
Deutsche Bank AG and Goldman Sachs Group Inc said they would sell up to 303.3 million shares – worth 740 million pounds – to comply with Qatar’s request. They sold shares at 244 pence apiece, a 4 percent discount to Friday’s closing share price, but did not confirm whether all the shares had been sold.
Qatar Holding said in a separate statement late on Sunday it had monetized its remaining holding of 379 million units of Barclays warrants – instruments that convert into shares – without affecting its 6.65 percent stake.
The warrants have not yet been converted, but can do so at 198 pence per share in the next year, which would reap a 180 million pound profit at current prices.
Notice: Read more »
Have you ever had construction going on nearby your home? Was it loud? Annoying? Did keep it keep you up in the middle of the night? Did you seriously consider opening your window and screaming “Hey! Shut the hell up down there!” or even confronting the people making all that racket face to face? Olivier Desbarres can relate. Or at least he can half relate. Because while most of you were probably talked out of making some sort of scene, either by your significant other or your own impulse control, on October 20th Desbarres decided to go in another direction, the one that involved introducing himself to the construction workers building a house near his own by screaming, “I’m gonna go after you, I will haunt you, I’m gonna burn your fucking house down, I will find your fucking family,” a task he noted would be fairly simple and straightforward (“I can find [them] very easily,” he explained, “I’m a man with resources”), in case there were doubts (a fairly reasonable concern, as there are a lot of people in Singapore and how were these guys supposed to know he had an army of Barclays researchers at his disposal?).
Still worried that the group wasn’t taking his threats seriously on account of the casual look he was sporting that morning– shorts and sandals– Desbarres then picked up some sheet metal and launched it in their direction, presumably to demonstrate he meant business.* Although that would have been a good time to make his exit, at that point Desbarres noticed that one of the men had been recording him without his consent, leading to: Read more »