Italian Police Seize Barclays Documents In EURIBOR Rates Probe

http://uk.reuters.com/article/2012/07/31/uk-italy-euribor-barclays-idUKBRE86U0BN20120731


Italian police seize Barclays documents in rates probe
By Antonella Ciancio and Edward Taylor
MILAN/FRANKFURT | Tue Jul 31, 2012 4:42pm BST

(Reuters) - Italian police have searched the Milan offices of Barclays as part of widening international investigations into alleged rigging of global interest rates, judicial sources and consumer groups said on Tuesday.

Barclays has been fined over $450 million by U.S. and British authorities for manipulating Libor benchmark rates, which are used to set prices for trillions of dollars of financial products across the globe. Its chief executive Bob Diamond was forced to quit over the scandal.

More than a dozen lenders, including UBS and Deutsche Bank, are being probed worldwide by investigators looking at whether Libor, which is priced in pounds, and other global benchmark rates were rigged.

The search at Barclays' Milan offices took place last Friday and was ordered by prosecutors in the southern city of Trani who earlier this month opened a criminal probe over suspected aggravated fraud and market manipulation, the sources said.

The Italian probe - one of a series of investigations in Europe, the United States and Japan - is focusing on Euribor, Libor's counterpart in euros and the base for mortgage rates in the country. The probe was started following complaints filed by consumer groups Adusbef and Federconsumatori.

The two groups said in a joint statement that documents, computer material and emails were seized at Barclays Milan offices "with the aim of looking for evidence that Barclays also manipulated Euribor, as it did with Libor, with a negative impact on mortgage rates paid by Italians."

Barclays declined to comment.


The judicial sources told Reuters neither Barclays nor any other bank had been put under formal investigation by the Trani prosecutors, who have made a speciality of high-profile investigations of international financial institutions.

The office is investigating the big ratings agencies, Moody's, Standard and Poor's and Fitch over their downgrades of Italy's sovereign rating.

Adusbef and Federconsumatori estimate 2.5 million Italian households may have been hurt by the alleged lending rate manipulation, estimating the total financial damage at 3 billion euros.

"Those responsible for financial manipulations will have to pay for their mistakes," Adusbef's president Elio Lannutti told Reuters.

DEUTSCHE PROBE CLEARS MANAGEMENT

Forty-three banks, including Italian lenders Intesa Sanpaolo, UniCredit, Banca Monte dei Paschi di Siena and UBI Banca, sit on the Euribor panel, which is hosted by the European Banking Federation.

In Germany, Deutsche Bank said the initial findings of an internal probe into the rigging of rates had found no wrongdoing by management board members.

"Based on current findings, no current or former member of the management board was in any way inappropriately involved in the incidents surrounding interest rates," the bank's supervisory board chairman Paul Achleitner said in a letter to employees.

The bank said the probe had shown that "a small number of employees" had engaged in behaviour which did not meet the standards of the bank, without being more specific.

Three people close to the investigation told Reuters last week that the internal probe found former traders may have been involved in colluding to manipulate global benchmark interest rates but there was no indication of failure at the top of the bank.

With the threat of more banks possibly facing fines and lengthy legal battles, UBS said it had appropriate provisions for all litigation.

Specifically, UBS, which has previously admitted probes into the yen and Swiss franc Libor and euroyen Tibor, has secured leniency from some justice authorities in return for cooperating with probes into the setting of Libor.

UBS signalled its exposure to Libor probes is limited to the three reference rates, and not others such as the Euribor, where several banks are said to be cooperating with EU antitrust regulators.

(Additional reporting by Vincenzo Damiani in Bari, Stefano Bernabei in Rome, Katharina Bart in Zurich. Writing by Silvia Aloisi; Editing by Stephen Powell)