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Singapore - A former dealer for the Royal Bank of Scotland
Group has provided fresh details on how traders at the British bank tried to
influence Libor rates, court documents filed in Singapore show.
Tan Chi Min, who is suing RBS for wrongful dismissal,
alleges that the bank’s minutes of his disciplinary meeting held in September
last year did not accurately reflect what was discussed and omitted details of
conversations about how traders at the bank tried to influence RBS’s interbank
lending rate submissions.
More than a dozen banks are currently under investigation by
regulators in the United States, Europe and Asia for suspected rigging of the
London interbank offered rate (Libor), which is used to price trillions of
dollars worth of financial products.
RBS confirmed earlier this month in its half-year results
that it was among those banks being investigated. Last month rival lender
Barclays was fined $453m in July by US and UK regulators after its staff
reported false interbank rates.
Tan was sacked from his Singapore-based role as head of
delta trading for the bank’s Global Banking & Markets division in November
2011 for trying to improperly influence the bank’s rate setters. Delta trading
involves using derivatives to mirror the price moves in a basket of securities.
In papers dated August 10, Tan says the information omitted
from the minutes includes reference to a conversation from March 2008 about the
submission of Libor rates. Tan claimed that a trader for the bank, Will Hall,
changed the Libor submission himself even though he was part of the Japanese
yen swap desk in London.
The papers say Tan then raised the issue at his disciplinary
meeting, saying that the bank’s internal procedure in London seemed to be that
“anyone can change Libor”.
He also claims the meeting referred to a Bloomberg messenger
conversation on March 14, 2011, during which Paul White, who was a rate setter
for the bank, informed trader Robert Brennan that he wanted Libor to be fixed
high.
Brennan then mentioned this to traders on a subsequent
conference call, according to the documents.
White declined to comment when contacted by Reuters on
Thursday. Reuters could not locate the other traders.
Tan filed his lawsuit against the bank late last year,
claiming the practice of traders making requests to the bank’s rate setters was
well known by RBS management. These latest filings come in response to requests
from RBS that he provide specific examples of when this alleged input occurred.
RBS is disputing the allegations, saying Tan was dismissed
for gross misconduct and that it followed its company disciplinary policy in
deciding to terminate his contract. It has already announced that it has
dismissed several employees in r elation to its inquiries into its interbank
rate setting.
“We confirm, per our disclosures during our interim results
on 3rd August, that we have dismissed a number of employees for misconduct as a
result of our investigations into the setting of Libor and other interest
rates,” said a spokesperson for RBS in Singapore.
“RBS Group continues to co-operate fully with ongoing
investigations relating to the setting of Libor and other interest rates.”
Tan is claiming a loss of bonuses from the bank comprising
S$264 522 ($211 300), ¥71 563 061 ($903 000) and 3.3 million RBS shares.
Thomson Reuters is the British Bankers’ Association’s
official agent for the daily calculation and publishing of Libor.
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