Financial Regulatory Forum

By Emmanuel Olaoye

WASHINGTON/NEW YORK, July 10 (Thomson Reuters Accelus) - A major theme in the Barclays scandal over rate-rigging is the firm’s failure to conduct adequate monitoring and testing of its compliance program, governance experts have told Thomson Reuters Accelus.

Barclays has agreed to pay $453 million to settle charges by U.S. and UK authorities that its employees manipulated the London Interbank Offered Rate, or LIBOR, a key benchmark for global financial transactions, including payments on mortgages, credit cards and other financial contracts.  (more…)

By Nick Paraskeva

NEW YORK, July 5 (Thomson Reuters Accelus) - The U.S. Commodity Futures Trading Commission’s $200 million settlement with Barclays for manipulation and false reporting of benchmark interest rates not only helped fuel a firestorm that consumed the bank’s top management. It also gives the futures regulator more clout to apply new Dodd-Frank swaps rules to activities abroad despite industry and political opposition, and to make a case against congressional Republicans for a strong enforcement budget.

The CFTC joined the U.S. Justice Department and Britain’s Financial Services Authority (FSA) in settling allegations that Barclays had manipulated Libor interbank rates in London that affect U.S. consumers and markets. The fine paid to the CFTC was the largest monetary penalty in the case, and the enforcement came hard on the heels of the revelation by JPMorgan Chase that it had discovered losses on its UK derivatives transactions that may grow to as much as $9 billion. (more…)

By Emmanuel Olaoye

WASHINGTON/NEW YORK, July 3 (Thomson Reuters Accelus) - A U.S. regulator’s case against Barclays revealed significant failures with the bank’s internal controls as well as failures with its corporate governance.

Barclays agreed last week to pay $453 million to U.S. and British authorities to settle allegations that it rigged key interbank lending rates, called the London Inter-bank Offering Rate (Libor) and a separate Euribor rate, by manipulating its reported rates in submissions to the British Bankers Association, which calculated the benchmark figures. (more…)

By Stuart Gittleman

NEW YORK/LONDON, June 28 (Thomson Reuters Accelus) - The $453 million settlement Wednesday between Barclays and UK and U.S. officials over the manipulation of a global interest-rate setting formula may be the first in a series of big-money settlements, and those who strike a deal later may face steeper terms.

“I think additional settlements with the other [banks potentially involved in the conduct] are likely,” said Peter Henning, a former U.S. federal prosecutor and enforcement lawyer with the Securities and Exchange Commission who teaches law at Wayne State University in Detroit. (more…)

By Joanne Wallen (Complinet)

Jan. 25 – British firms continue to be referred to enforcement despite the best intentions of the Financial Services Authority’s thematic reviews and credible deterrence strategies. On the one hand it looks as though the risks are considered to be worth taking. On the other, reputational damage and loss of trust for the whole industry are at stake.

Last week was overshadowed by the large fine that Barclays received for giving unsuitable investment advice to retail clients about two funds in particular. The fine was 7 million pounds, and the firm is also likely to have to pay up to 60 million pounds in redress, as well as carrying out a past business review and employing a firm of accountants to review customer files. The total cost of the enforcement action will, therefore, be significant.

Compared with the amount of investment a large firm would have to make to consolidate all its legacy systems into one, to revamp all its systems and controls throughout the entire group, to beef up its compliance team and to ensure that every member of staff was properly trained, the costs may not be so high after all.

By Lisa Jucca and Martin Howell

DAVOS, Switzerland, Jan 29 (Reuters) – The world’s top financiers are at odds about how to fight back against a global push for tougher financial regulation, with commercial and investment banks struggling to reach common ground.

Top executives from Wall Street and Europe’s leading banks have been holding behind-the-scenes talks at the World Economic Forum in the Swiss ski resort of Davos, sources close to the negotiations said, but a deal has proved elusive.

Wall Street’s largest and some major European investment banks argued in favour of a tough common front against politicians who are calling for much tougher measures to regulate the industry in the wake of the financial crisis.

    MUMBAI, Dec 10 (Reuters) – Barclays <BARC.L> said on Thursday it was cooperating with the Securities and Exchange Board of India (SEBI), a day after the Indian regulator barred the British bank from transacting new offshore derivative instruments. (more…)

   HORSHAM, England, Dec 8 (Reuters) – Imposing a tax on bankers’ bonuses would not be in line with the principles for compensation set out by leading G20 countries last year, the head of Barclays’ <BARC.L> investment bank said on Tuesday. (more…)

– John Kemp is a Reuters columnist. The views expressed are his own –
By John Kemp
LONDON, Oct 12 (Reuters) – The UK Financial Services Authority (FSA)’s decision to censure two Dresdner Kleinwort traders for trading while in possession of inside information about a forthcoming issue of floating rate notes by Barclays has implications that go far beyond the offence of trading ahead of a formal announcement.
By censuring the traders, the FSA is attempting to establish a precedent about how it will deal with the defence of “accepted market practice” in future, restricting it significantly, in a move that will force a wider re-examination of entrenched practices across the financial markets in London.

(more…)

   By Phil Wahba and Emily Chasan
   NEW YORK, Sept 15 (Reuters) – Lehman Brothers Holdings Inc <LEHMQ.PK> said on Tuesday that Barclays Capital Inc <BARC.L> got a $8.2 billion “windfall profit” from excess assets it took control of in the fire sale of Lehman’s U.S. brokerage business a year ago. (more…)