The U.K. Financial Conduct Authority (FCA) has permanently banned a former trader for his role in manipulating the LIBOR interest rate benchmark, the regulator announced on Tuesday.
The FCA banned Paul White, who formerly made LIBOR submissions for Royal Bank of Scotland (RBS), ruling that he demonstrated a lack of integrity in that role between 2007 and 2010. White let the firm’s derivatives traders influence his submissions, as they sought to benefit their own trading positions, the FCA says.
“As a LIBOR submitter Mr. White had an obligation to ensure the submissions he made were proper ones. By allowing his submissions to be set, in effect, by those with collateral financial interests in the outcome, Mr. White recklessly disregarded the risk — the obvious risk — that his LIBOR submission might corrupt LIBOR’s integrity,” said Mark Steward, director of enforcement and market oversight at the FCA, in a statement.
The FCA says that it would have fined White £250,000 ($500,000) “…were it not for [his] serious financial hardship.”
This latest ban is the FCA’s fourth public action against a trader for manipulating LIBOR submissions; in addition to fines and bans for senior executives over LIBOR-related compliance failures, which were handed out in 2015. The regulator has also imposed £426 million ($783 million) in fines on firms for misconduct relating to LIBOR.
“This ban should reinforce the message that working in financial markets entails obligations and responsibilities and that serious failures will result in substantial penalties including fines and prohibitions,” adds Steward.