The Phaserl


Citigroup and JPMorgan Settle With EU Commission for Rigging Libor; U.S. Justice Department Stays Mum

By Pam Martens, Wall Street on Parade:

Gary Gensler, the outgoing Chairman of the Commodity Futures Trading Commission, previously testified to Congress that he began investigating allegations that a global banking cartel was rigging the international interest rate benchmark known as Libor in the spring of 2008. One can prudently assume that around the same time, he made the issue known to the U.S. Department of Justice. It’s now almost six years later and yet two of the U.S. banks involved in the cartel, JPMorgan Chase and Citigroup, have yet to be charged by U.S. authorities.

Today, JPMorgan and Citigroup have admitted participating in the Yen Libor financial derivatives cartel to the European Commission and accepted fines of €79.8m ($108.3 million) and €70m ($95 million), respectively. Citigroup avoided paying an additional €55m ($74.6 million) by being granted full immunity for one of its three charged infringements, ostensibly for its cooperation in the matter.

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1 comment to Citigroup and JPMorgan Settle With EU Commission for Rigging Libor; U.S. Justice Department Stays Mum

  • rich

    Another Batch of Wall Street Villains Freed on Technicality By Matt Taibbi Read more:

    “Of course, you won’t hear about the recent financial corruption case, United States of America v. Carollo, Goldberg and Grimm, called anything like that . . . But this just completed trial in downtown New York . . . allowed federal prosecutors to make public for the first time the astonishing inner workings of the reigning American crime syndicate, which now operates not out of Little Italy and Las Vegas, but out of Wall Street.”

    Dominick Carollo, Steven Goldberg and Peter Grimm were mid-level players who worked for GE Capital. They were involved in a wide-ranging scheme (one that also involved most of America’s biggest banks, from Chase to BOA to Wachovia) to skim billions of dollars from America’s cities and towns by rigging the auctions banks set up to help towns earn the highest returns on the management of municipal bond issues.

    The case was over 10 years in the making and involved offenses that took place long before the 2008 crash. All three defendants were convicted in May 2012, with Goldberg ultimately getting four years and the other two getting three.

    Now, they’re all free. A New York federal judge last week ordered their convictions overturned in a quiet Thanksgiving-week transaction.

    As one antitrust lawyer I know put it: “Apparently, the government can’t seem to get criminal trials involving financial executives (as opposed to, well, drug dealers) right. Go figure.”

    In this case, the defendants were shielded by the sheer complexity of the case. It would appear that the state took so long sorting through the mountains of recorded conversations and interviews to find the massive but well-camouflaged crime – these men, along with others like them in other banks, were using code words to rig the auction process so that banks and finance companies could collude and bid lower for city and town money management business – that the statute of limitations ran out on their own individual actions. When that happened, the Feds then switched up and charged them with different crimes related to what they claimed was an ongoing conspiracy, using continuing interest payments to establish the “ongoing” part of the indictment.

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