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US judge sentences RBS Securities Japan to pay $50m fine over Libor fixing

A US District of Connecticut judge Michael Shea has sentenced RBS Securities Japan, a wholly owned subsidiary of the Royal Bank of Scotland (RBS), to pay the agreed-upon fine for its alleged involvement in the Libor rigging scandal.

RBS

Shea found the Tokyo-based investment bank guilty for manipulating the Japanese Yen London Interbank Offered Rate (LIBOR).

On 12 April 2013, RBS Securities Japan pleaded guilty for influencing Yen Libor benchmark interest rates and signed a plea agreement in which it accepted its criminal conduct and agreed to pay $50m penalty.

Besides, the Edinburgh, Scotland-based parent company of RBS Securities Japan, reached a deferred prosecution agreement (DPA) with the government requiring RBS to pay an additional $100m fine, to admit and accept responsibility for its misconduct.

Along with nearly $462m in regulatory penalties and disgorgement, the US Justice Department’s criminal penalties bring the total amount of the resolution with RBS and RBS Securities Japan to almost $612m.

US Department of Justice Criminal Division acting assistant attorney general Mythili Raman said that the sentencing of RBS is an important reminder of the significant consequences facing banks that deliberately manipulate financial benchmark rates.

In December 2013, the European Commission (EC) imposed a monetary penalty of €391m (£324m) on British lender RBS for its role in fixing Libor.

Libor and Euribor are lending benchmark for the banks in the European region, whose valuations directly affects the value of trillions of dollars of financial deals between banks and other institutions.

Image: Royal Bank of Scotland NV (RBS) Head Office in Istanbul, Turkey. Photo courtesy of Reise Reise.