Joel Muckett 10 Jan 2018 02:56pm

Ex-RBS trader banned for Libor rigging

A former Royal Bank of Scotland trader has been banned for life and fined £250,000 for manipulating Libor rates

The Financial Conduct Authority (FCA) said Neil Danziger, a former interest rate derivatives trader, frequently made improper Japanese Yen (JPY) Libor requests to primary submitters to benefit his positions between 2007 and 2010.

On occasions where he acted as a substitute submitter, Danziger made JPY Libor submissions, taking into account “requests of other RBS derivatives traders”.

From 2008 to 2009, Danziger was also found to participate in 28 wash trades – that is risk free trades with the same party that cancel out one another – with the intention of paying brokers for no legitimate commercial reason.

The watchdog determined that Danziger was “not a fit and proper person” due to his reckless actions and lack of integrity.

“Proper standards of market conduct reflect the interests of the whole community in the well-being of our financial markets,” said FCA executive director of enforcement and market oversight Mark Steward.

He added that Danziger’s “reckless disregard” of standards had “no place in the financial services industry”.

“Market participants cannot turn a blind eye to what the community, through its laws and regulations, expects – nor apply their own lower standards. The substantial fine and ban should reinforce that message.”

But Mr Danziger’s lawyer Ben Rose said Danziger "feels strongly that he is being scapegoated for the systemic problems relating to Libor" and confirmed that he would continue to dispute the FCA's findings. “However, the last five years have been incredibly challenging. [Danziger] 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.”

Danziger is not the only RBS trader to be banned from the financial services industry.

In April 2016, the FCA banned former RBS Libor submitter for JPY and the Swiss Franc, Paul White, for similar conduct between March 2007 and November 2008.

Former trader Tom Hayes was found guilty of Libor rigging in 2015, and was initially sentenced to 14 years’ imprisonment (later reduced to 11 years).

Last November, the Upper Tribunal supported Hayes’ application to defer a ban from the FCA until a review of his conviction by the Criminal Cases Review Commission is announced.

Overall, seven financial penalties have been imposed on firms by the FCA – totalling £426m – for misconduct relating to Libor.