The City watchdog has fined and banned a former RBS trader for Libor manipulation and trading misconduct

 
Lucy White
London's Economic Boom Continues
Danziger disputes the FCA's findings (Source: Getty)

The City watchdog has fined and banned a former Royal Bank of Scotland (RBS) interest rate derivatives trader, Neil Danziger.

The Financial Conduct Authority (FCA) levied Danziger with a £250,000 penalty and a ban for life from any regulated financial activity.

The former trader was accused of attempting to manipulate the Libor rate for Japanese yen, and entering into "wash trades" through which he paid two brokerage firms "in recognition of his receipt of personal hospitality".

Read more: Not so fast: Tom Hayes halts City watchdog decision to ban him over Libor rigging

“Proper standards of market conduct reflect the interests of the whole community in the well-being of our financial markets. Mr Danziger’s reckless disregard of these standards has no place in the financial services industry," said the FCA's Mark Steward.

Danziger refutes the FCA's findings, but will not be taking his case with the watchdog any further.

“Mr Danziger continues to dispute the FCA’s findings and feels strongly that he is being scapegoated for the systemic problems relating to Libor," said his lawyer Ben Rose, of Hickman & Rose.

However, the last five years have been incredibly challenging. He is emotionally exhausted and financially drained. He leaves it to others, better resourced, to press the FCA for answers, hopeful that, one day, the real truth will come out.

Read more: Former UBS trader says bank ordered him to discuss Libor rate as he contests FCA ban

The finer details

The FCA said it had banned Danziger as he "is not a fit and proper person because he acted recklessly and lacks integrity".

While working at RBS, he traded products referenced to Japanese yen Libor. On occasion, he would make RBS's Libor submissions to the British Banking Association when the primary submitters were not available.

According to the FCA, between February 2007 and November 2010 Danziger routinely made requests to the primary submitters intending to benefit his and other traders' positions, took his trading positions into account when he acted as a submitter, and on two occasions obtained a broker’s assistance to attempt to manipulate the Japanese yen Libor submissions of other banks.

Added to that, the watchdog said Danziger entered into 28 wash trades between September 2008 and August 2009. These were risk-free trades with the same party, in pairs that cancelled each other out, for which "there was no legitimate commercial rationale". These trades were purely to facilitate payment to brokers.

Read more: Financial Conduct Authority made "serious errors" in Libor case says complaints watchdog

Related articles