FCA fines former RBS trader over LIBOR

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The Financial Conduct Authority (FCA) today imposed a penalty of £250,000 on former Royal Bank of Scotland (RBS) derivatives trader Neil Danziger, and banned him from having any role relating to regulated financial activity, in addition to his fine.

Danziger worked at RBS, trading products referenced to LIBOR, the inter-bank lending rate. In addition, on occasion, he made RBS’s Japanese Yen LIBOR submissions to the British Bankers Association (BBA) when RBS’s primary submitters were not available. The FCA found he acted recklessly, and therefore with a lack of integrity, in deliberately closing his mind to the risk that his actions were improper.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA welcomed the decision: “Proper standards of market conduct reflect the interests of the whole community in the well-being of our financial markets. Danziger’s reckless disregard of these standards has 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. This substantial fine and ban should reinforce that message.”

The FCA found that between February 2007 and November 2010, Danziger made frequent requests to RBS’s primary submitters, intending to benefit the trading positions for which he and other derivatives traders were responsible.

Between September 2008 and August 2009, Danziger conducted 28 wash trades – risk free trades, with the same party, in pairs that cancelled each other out and for which there was no legitimate commercial rationale.