U.K. Fraud Agency Opens Criminal Probe of Barclays

Britain's Serious Fraud Office says it has formally opened a criminal investigation of Barclays' manipulation of a key market interest rate.

LON

LONDON — Britain’s Serious Fraud Office (SFO) has made the first arrests as part of a global investigation into the manipulation of interbank lending rates. The SFO said on Tuesday three British men, aged 33, 41 and 47, had been taken to a London police station for interviews. They had all been living in Britain. Sources had said that regulators and prosecutors in the U.S. and Europe were closing in on individual traders they suspected of colluding to rig key benchmark lending rates such as Libor (London interbank offered rate) and its euro cousin Euribor.

Royal Bank of Scotland Group saw 1.3-billion pounds (US$2.1-billion) wiped off its value on Tuesday following a report that it could face criminal charges as part of an impending settlement over its role in a global interest rate rigging scandal. The Wall Street Journal reported that U.S. authorities were pushing RBS to accept criminal charges as part of a settlement which will see it fined up to 500-million pounds for the attempted manipulation of the London interbank lending rate (Libor) and other benchmark interest rates.

UBS AG, Switzerland’s biggest bank, may be fined more than US$1-billion by U.S. and U.K. regulators for trying to rig global interest rates, more than double the amount levied against Barclays Plc, according to a person familiar with the probe.