LIBOR SCANDAL: GREATEST FINANCIAL CRIME OF THE CENTURY — WHISTLEBLOWERS EMERGING AGAINST OTHER BANKS

Despite the many great scandals of this century, including the sub-prime mortgage crisis which put the United States on its knees, the interest rate fixing LIBOR scandal has already been recognized as the most egregious financial crime of the century. It could results in billions of dollars in damages against major banks here and abroad. LIBOR is an acronym for the London interbank offered rate which is the average interest rate the world’s largest banks pay when they borrow money. This figure prices trillions worth of dollars of financial instruments including high yield corporate debt to student loans. Barclay’s Bank recently admitted that it was fined $450 million by British and American regulators for influencing the LIBOR rates. Barclay’s and other banks are now charged with colluding to incfluence LIBOR so they could reap profits on derivatives trades. This is a form of insider trading on information obtained by the banks. Indeed, the scandal has been called the largest insider trading scandal in history. The contention is that the banks were systematically understating their borrowing costs. So far, the other banks have not been named. Two days ago, the media reported that a whistleblower, a former senior employee of Barclays said that the bank’s chief executive Bob Diamond would have known that his traders were involved in the interest rate rigging scandal. In addition, major investigations of American banks have begun to determine their levels of involvement. Tracey McDermott, the acting director of enforecement and financial crime at the Serious Fraud Office in England said last week that a number of significant cross border investigations are under way at other banks. Citigroup Inc., The Royal Bank of Scotland Group, UBS AG. ICAP, Lloyds Bank Group and Deutsche Bank are among the firms that regulators are investigating.  Michael Hausfels whose Washington law firm has filed an anti-trust class action against 21 financial firms said the LIBOR scandal could result in billions of dollars against the banks. Jeffrey Newman represents whistleblowers.  His email address is Jeff@JeffNewmanLaw.com