The regulator didn’t specifically suspect anything re: propensity for manipulating Libor, just a general feeling it couldn’t necessarily trust the guy, which Barclays chairman Marcus Agius conceded was not entirely off base. Read more »
Good lord are these Barclays settlements juicy. Basically every day for two years one Barclays trader or another would send an email to their Libor submitter saying “hey let’s commit crimes, tons of crimes, hahahaha” and then they did. In pathetically colorful language:
Trader C requested low one month and three month US dollar LIBOR submissions … “If it’s not too late low 1m and 3m would be nice, but please feel free to say “no” … Coffees will be coming your way either way, just to say thank you for your help in the past few weeks”. A Submitter responded “Done … for you big boy”.
on 5 February 2008, Trader B (a US dollar Derivatives Trader) stated in a telephone conversation with Manager B that Barclays’ Submitter was submitting “the highest LIBOR of anybody […] He’s like, I think this is where it should be. I’m like, dude, you’re killing us”.
Or tons more, but I found this one particularly poignant:
Submitter: “Hi All, Just as an FYI, I will be in noon’ish on Monday […]”.
Trader B: “Noonish? Whos going to put my low fixings in? hehehe”
Submitter: “[…] [X or Y] will be here if you have any requests for the fixings”.
Like … Trader B was kidding right? I mean, in this one single case? He was making a joke about how he was constantly asking for low fixings and the submitter took him seriously? When you joke around about committing fraud and people take you seriously, that’s maybe a sign you should stop committing so much fraud. Read more »
What is your model of what the FSA is thinking in its insider-trading crackdown? Here is this Decision Notice against JPMorgan global ECM chairman and general mining-industry macher Ian Hannam, shown here being unspeakably awesome in Afghanistan*, and he got in quite a bit of trouble for some pretty minor badness. Basically he was advising Heritage Oil and its CEO, Tony Buckingham, on a bunch of things including (1) being acquired by another company which is unnamed but let’s just call it Acme and (2) selling a stake in itself to “Mr A, a representative of an organisation with interests in Kurdistan (Organisation C),” which, there is a part of me that thinks that the organization was actually named “Organisation C” and that the guy would call Hannam and be like “Ian? Mr. A here.” No? I refer you again to that picture.
Anyway as things got serious with Acme in September ’08, Hannam sent an email to Mr. A saying:
“I thought I would update you on discussions that have been going on with a potential acquirer of Tony Buckingham’s business. Tony, advised by myself, has deferred engaging with the client until Thursday of next week although we know they are very excited about the recent drilling results of Heritage Oil … I believe that the offer will come in in the current difficult market conditions at £3.50-£4.00 per share. I am not trying to force your hand, just wanted to make you aware of what is happening.”
Later, he sent another email to Mr. A ending “PS – Tony has just found oil and it is looking good,” and bcc’ed Mr. B, “a businessman with interests in Kurdistan,” about whom we get no further information though I’m guessing pretty much everyone named or pseudonymed here could have someone killed on 24 hours’ notice if it came to that. Read more »
…about all this. For starters:
– “This is as much like insider trading as soccer is like football”
– “The FSA has spent the last two years forcing square pegs into round holes”
– “This is like a traffic cop with a quota at the end of the month, with a miscalibrated radar gun”
– Greenlight has a recording of the call in question, which contains no evidence of insider trading Read more »
According to the FSA, which imposed the £7.2 million fine for “inadvertently engaging in market abuse in connection with trading of Punch Taverns…the market abuse was not deliberate or reckless. Mr. Einhorn did not believe that the information that he had received was inside information and he did not intend to commit market abuse.” Sayeth Einhorn: Read more »
FSA To Require Firms To Record Employees’ Phone Calls Despite It Being A Waste Of Money That Enterprising Insider Traders Will Undoubtedly Work AroundBy Bess Levin
The Financial Services Authority announced today that “relevant communications made with, sent from or received on mobile phones and other handheld devices must be recorded and stored for six months.” The new rule is expected to cost banks at least 10,000 pounds ($16,000) per phone, per year, which they are none too pleased about, especially given the pointlessness of the exercise. Is the UK regulator aware of the fact that if someone wants to insider trade, they’re gonna find a way, regardless of their work phone being tapped (like, for instance, using a personal phone or meeting in person to trade hot tips) and that the only thing they’re going to determine from these calls is which banks employ the highest number of bondage and clown fetishists? Yes, and they don’t care. Read more »
I’m not promoting alcoholism, but like so many things in life, there are some activities many of you are better at while under the influence. Sadly, in London, one guy had to ruin it for the whole group. Steve Perkins, the oil trader who bought 7.13 million barrels of crude oil on behalf of his firm after “a drunken golf weekend” has been fined £72,000 and banned from the industry for a minimum of 5 years.
The 34-year-old, who lives in Brentwood, was a senior trader for PVM in the West End when he went on his spree last June. Working from a laptop at home after a weekend playing golf, he was able to move the oil market by engaging in huge amounts of speculative buying at ever-higher prices. In a statement, the FSA said: “Mr Perkins’ explanation for his trading on 29 and 30 June is that he was drunk. He says that he drank heavily throughout the weekend and continued drinking from around mid-day on Monday 29 June. He claims to have limited recollection of events.”