A former Royal Bank of Scotland trader has been fined £250,000 and banned from regulated trading by the City watchdog over his role in the Libor-rigging scandal.
Neil Danziger, who was a derivatives trader at the state-backed bank, “improperly and routinely” asked RBS Libor submitters to change the rates they submitted in order to benefit his positions, the Financial Conduct Authority said on Monday. The misconduct took place between 2007 and 2010.
Mr Danziger is “not a fit and proper person because he acted recklessly and lacks integrity”, the FCA said.
He submitted RBS’s yen Libor rate himself on occasions where other employees responsible were absent. On those occasions he “took into account requests of other RBS derivatives traders [and] trading positions for which he and other derivatives traders were responsible”, the FCA stated.
The Libor rates submitted by the major banks are used to price billions of dollars of loans and trillions of dollars of derivatives. A small movement either way could provide large gains or losses for a trader.
The FCA said that Mr Danziger had also recklessly entered into 28 “wash trades” – deals that effectively cancel each other out – which had “no legitimate commercial rationale”. The purpose of these trades was to pay fees to brokers in return for personal hospitality that they had provided Mr Danziger, the FCA said.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Proper standards of market conduct reflect the interests of the whole community in the well-being of our financial markets.
“Mr Danziger’s reckless disregard of these standards has no place in the financial services industry.
“Market participants cannot turn a blind eye to what the community, through its laws and regulations, expects, nor apply their own, lower standards. This substantial fine and ban should reinforce that message.”
The watchdog added that Mr Danziger acted recklessly and with a lack of integrity in “deliberately closing his mind to the risk that his actions were improper”.
Mr Danziger’s lawyer Ben Rose, of the law firm Hickman & Rose, said: “Mr Danziger continues to dispute the FCA’s findings and feels strongly that he is being scapegoated for the systemic problems relating to Libor.
“However, the last five years have been incredibly challenging. He is emotionally exhausted and financially drained. He leaves it to others, better resourced, to press the FCA for answers, hopeful that, one day, the real truth will come out.”
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