On June 27, 2012—four years, two months and 11 days after The Wall Street Journal raised the alarm—Barclays became the first bank to reach a settlement with the authorities for rigging Libor. At 2 p.m. in London, 9 a.m. in Washington, the CFTC, the Justice Department and the FSA simultaneously pushed out notices outlining the bank's transgressions and issuing fines totaling $453 million.
The offenses outlined in the documents fell into two categories: Traders, principally in New York, had, between 2005 and 2009, pressured the individuals responsible for submitting Libor in London to alter their inputs to suit their derivatives positions; and managers, mostly in London, had ordered rate-setters to lowball their figures during the crisis.
Just as striking as what the bank's employees did was the brazen way they talked about it. Investigators cherry picked the most shocking e-mails and instant messages for maximum impact. They were gift wrapped for journalists.
In one chat, a former Barclays trader who had moved to another firm thanked a current employee who'd helped him influence that day's rate by typing: “Dude. I owe you big time! Come over one day after work and I'm opening a bottle of Bollinger.”1 In another, a trader asked a rate-setter: “If it's not too late low 1m and 3m would be nice, but please feel free to say no,” to which the submitter replied: “Done…for you big boy.”
Nobody at Barclays expected to get an easy ride, but the mood ...