US accuses former Société Générale bank managers of Libor scheme

Banks including Societe Generale use Libor to set rates on hundreds of trillions of dollars of mortgages, credit cards and other loans. (Reuters)
Updated 25 August 2017
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US accuses former Société Générale bank managers of Libor scheme

WASHINGTON: US authorities have charged two managers at French bank Société Générale with taking part in a scheme to manipulate the global US dollar Libor benchmark interest rate.
Danielle Sindzingre, 54, the bank’s former global head of treasury, and her subordinate Muriel Bescond, 49, its former head of treasury in Paris, were accused in an indictment filed in a New York federal court of submitting false information about the rates at which the bank was able to borrow money.
The two defendants are not currently in the US, according to John Marzulli, a spokesman for US prosecutors in Brooklyn. He declined to comment on whether or when they might be extradited.
Attorneys for the defendants could not immediately be identified.
SocGen said on Friday it was co-operating with authorities over the matter.
“Société Générale has received formal requests for information from several authorities, including the US Department of Justice, in connection with investigations regarding submissions to the British Bankers Association for setting certain benchmark rates, including the London Interbank Offered Rates (Libor),” it said in a statement.
“Société Générale is cooperating with the investigating authorities,” it added.
Sindzingre is currently listed on the bank’s website as global co-head of fixed income, credit and currencies. Bescond’s LinkedIn page says she is global head of short-term derivatives.
Banks use Libor to set rates on hundreds of trillions of dollars of mortgages, credit cards and other loans. Libor rates in several different currencies are calculated based on banks’ reports of how much interest they pay to borrow money.
Prosecutors said that from about May 2010 to October 2011, Sindzingre, Bescond and several other people who are not charged or named in the indictment caused Société Générale to report false lower rates that were used to set the US dollar Libor.
According to the indictment, the scheme aimed to shore up the bank’s reputation after outside analysts drew attention to higher-than-average interest rates Société Générale had been reporting.
The false reports at times led to lower US dollar Libor rates, affecting millions of transactions tied to the benchmark and causing over $170 million in harm to global financial markets, prosecutors said.
The indictment said that in about June 2010, Sindzingre became concerned that the false reports could catch the attention of financial regulators, and suggested to her superiors that they begin to increase the reported rates to match the bank’s actual borrowing rate. Nonetheless, the false reports continued, according to the indictment.
Sindzingre and Bescond are charged with conspiracy and transmitting false reports.
Banks have paid roughly $9 billion to resolve Libor-rigging probes worldwide, and several people have been convicted of criminal charges.


Oil eases from 4-month high on global growth worries

Updated 34 min ago
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Oil eases from 4-month high on global growth worries

  • The losses came amid worries over global economic growth after the US Federal Reserve highlighted signs of a slowing economy
SYDNEY: Oil prices edged lower on Thursday, retreating from a four-month peak, as fears of a slowing global economy weighed on market sentiment.
US West Texas Intermediate (WTI) crude futures were at $60.16 per barrel at 0040 GMT, down 7 cents, or 0.1 percent, from their last settlement. WTI had earlier hit a high of $60.19 a barrel — the highest since November 12.
International Brent crude oil futures were at $68.47 a barrel, down 3 cents from their last close. Brent touched $68.57 a barrel on Wednesday, its highest since November 13.
The losses came amid worries over global economic growth after the US Federal Reserve highlighted signs of a slowing economy.
Markets have been underpinned, however, by efforts led by the Organization of the Petroleum Exporting Countries (OPEC) to curb supply, and losses were checked as widely watched US data showed supplies were tightening.
“Oil markets appear convinced that the continued effects of the Saudi Arabia oil production cuts and falling exports to the US will continue to outweigh the concerns of rising US production,” said Alfonso Esparza, senior market analyst at brokerage, OANDA.
US crude oil stockpiles last week fell by nearly 10 million barrels, the most since July, boosted by strong export and refining demand, the Energy Information Administration said on Wednesday.
Stockpiles fell 9.6 million barrels, compared with analysts’ expectations for an increase of 309,000 barrels. The draw brought stockpiles to their lowest since January.
Gasoline and distillate inventories both fell by more than expected. Gasoline stocks fell by 4.6 million barrels, while distillate inventories fell by 4.1 million barrels.