RBS Bond Trader Sorry About The Whole Attempt To Cheat Customers Out Of Millions Thing

Actually, we don't know if he's sorry but he his pleading guilty, so.

Author:
Updated:: Jan 14, 2019
Original:: Mar 12, 2015

A bond trader pleaded guilty on Wednesday to conspiring to defraud Royal Bank of Scotland Group Plc customers by lying about the prices of bond transactions he handled for them in an effort to boost the bank's profit. Matthew Katke, 34, of New York, pleaded guilty to one count of conspiracy to commit securities fraud and will cooperate with prosecutors, U.S. Attorney Deirdre Daly in Connecticut said...Prosecutors said Katke conspired with colleagues at RBS, where he worked from 2008 to 2013, to cheat customers out of millions of dollars on collateralized loan obligations, causing buyers to pay too much and sellers to accept deflated prices. Katke would typically lie about sellers' asking prices and keep the differences or charge extra commissions by inventing third-party sellers, prosecutors said. [Reuters]

Getty Images

He's gone back on the 'office bros before regulator hoes' pledge.

One thing that most people probably agree on is that having their instant messages, e-mails, and phone calls end up court would be cause for at least a little embarrassment. Everyone's thrown in an emoticon they aren't proud of, some of us have used company time to chat with significant others about undergarments, and the vast majority of workers have spent a not insignificant amount of the workday talking shit about their superiors. Of course, the humiliation gets ratcheted up a notch in the case of people who 'haha' (and in extreme circumstances "hahahah') their own jokes* which, just for example, involve habitual Libor manipulation. Tan Chi Min knows what we're talking about: “Nice Libor,” Tan said in an April 2, 2008, instant message with traders including Neil Danziger, who also was fired by RBS, and David Pieri. “Our six-month fixing moved the entire fixing, hahahah.” And while having such an exchange become public would be tremendously awkward for most, you know what's really 'hahaha' about this whole thing is that 1) Tan was the one who wanted people to read the above, which was submitted as part of a 231-page affidavit earlier this month and 2) He's trying to use it as evidence that he didn't deserve to be fired. The conversations among traders at RBS and firms including Deutsche Bank AG illustrate how the risk of abuse was embedded in the process for setting Libor, the benchmark for more than $300 trillion of securities worldwide......Tan, the bank’s former Singapore-based head of delta trading for Asia, [is] suing Britain’s third-biggest lender by assets for wrongful dismissal after being fired last year for allegedly trying to manipulate the London interbank offered rate, or Libor. Tan, who 'allegedly' tried to manipulate the London interbank offered rate, also included this conversations as part of his defense: “What’s the call on Libor,” Jezri Mohideen, then the bank’s head of yen products in Singapore, asked Danziger in an Aug. 21, 2007, chat. “Where would you like it, Libor that is,” Danziger asked, according to a transcript included in Tan’s filings. “Mixed feelings, but mostly I’d like it all lower so the world starts to make a little sense,” another trader responded. “The whole HF world will be kissing you instead of calling me if Libor move lower,” Tan said, referring to hedge funds. “OK, I will move the curve down 1 basis point, maybe more if I can,” Danziger replied. And this: In another conversation on March 27, 2008, Tan called for RBS to raise its Libor submission, saying an earlier lower figure the bank submitted may have cost his team 200,000 pounds. “We need to bump it way up high, highest among all if possible,” Tan said. Tan also asked for a high submission in an Aug. 20, 2007, instant message to Scott Nygaard, global head of RBS’s treasury markets in London. “We want high fix in 3s,” Tan said in the message. “Neil is the one setting the yen Libor in London now and for this week and next.” Also this: “It’s just amazing how Libor fixing can make you that much money or lose if opposite,” Tan said on an Aug. 19, 2007, conversation with traders at other banks, including Deutsche Bank’s Mark Wong. “It’s a cartel now in London.” And this philosophical one, for good measure: “This whole process would make banks pull out of Libor fixing,” Tan said in a May 16, 2011, chat with money markets trader Andrew Smoler. “Question is what is illegal? If making money if bank fix it to suits its own books are illegal... then no point fixing it right? Cuz there will be days when we will def make money fixing it.” The defense rests. RBS Instant Messages Show Libor Rates Skewed for Traders [Bloomberg] *Although actually people who do this probably don't even have the good sense to be ashamed of themselves.

Remember Russell Wasendorf? CEO of collapsed brokerage firm Peregrine Financial Group? Dirty blonde hair, about yea high? Opened his (attempted) suicide note with the words "I have committed fraud" and then went on to detail said fraud, writing: "Through a scheme of using false bank statements I have been able to embezzle millions of dollars from customer accounts at Peregrine Financial Group, Inc. The forgeries started nearly twenty years ago and have gone undetected until now. I was able to conceal my crime of forgery by being the sole individual with access to the US Bank accounts held by PFG. No one else in the company ever saw an actual US Bank statement.The Bank statements were always delivered directly to me when they arrived in the mail. I made counterfeit statements within a few hours of receiving the actual statements and gave the forgeries to the accounting department.” Using a combination of Photo Shop, Excel, scanners, and both laser and ink jet printers I was able to make very convincing forgeries of nearing every document that came from the Bank. I could create forgeries very quickly so no one suspected that my forgeries were not the real thing that had just arrived in the mail." ...apparently he was just kidding about all that and/or intended it to be read in more of an If I Did It style. The chief executive of Peregrine Financial Group Inc. on Friday pleaded not guilty to all 31 charges he faced of misleading federal market authorities as part of a long-running alleged fraud. Russell Wasendorf Sr., the head of the collapsed U.S. futures and currency brokerage, was formally charged this past week with 31 counts of misleading regulators, offenses that carry a maximum sentence of 155 years. It is one of the heaviest penalties sought in the wake of the last financial crisis. No further questions. Peregrine's Wasendorf Pleads Not Guilty [WSJ]

Just because their manipulation of Libor has gotten the most notice doesn't mean it's the only thing like to mess with. Don't box them into that corner, like your one-trick ponies at Barclays. Royal Bank of Scotland suspended a trader for trying to rig the Singapore dollar swap offer rate, indicating employees may have sought to manipulate more than just Libor, two people briefed on the matter said. Senior trader Chong Wen Kuang was put on leave earlier this year for trying to rig the interest rate to benefit his trading position, said the people who asked not to be identified because the bank is probing his actions. He is the first RBS employee to be suspended or fired for attempting to rig a benchmark other than the London interbank offered rate, one of the people said. RBS Said To Suspend Trader Of Interest Rate Rigging [RBS] Earlier: RBS Trader Whose Instant Messages Clearly Show Him (Allegedly) Engaging In Libor Manipulation Not Going Down Without A Fight

The bad news is that 600 of the Queen's corgis are being let go. The good news, while it probably comes as little solace to those who will no longer receive birthday chickens, is that 300 or so new ones will be hired in their place. State-backed lender Royal Bank of Scotland is making more than 600 staff redundant as a result of legislation due to come into force at the end of the year, bringing total staff reductions at the bank since its 2008 bailout to around 36,000. RBS, 82 percent owned by the government, said the jobs would go as a result of new UK rules requiring retail financial products such as savings and investment vehicles to be sold by more highly qualified staff and charged a fee. "As a response to this we will be reducing the number of roles by 618 across the UK and creating 351 new roles," an RBS spokesman said on Tuesday. "Having to cut jobs is the most difficult part of our work to rebuild RBS and repay taxpayers for their support. We continue to make efficiencies across our business to deliver greater value toour customers and shareholders," the spokesman added. RBS Job Loss Hits 36,000 [Reuters]

Getty Images

They'd really love if we could pretend it never happened.

CLOSE

CLOSE

CLOSE

CLOSE