What’s Next for Elizabeth Holmes in the Theranos Fraud Case?

Once celebrated as a Silicon Valley unicorn, Theranos has become the latest tale of corporate hubris and investor myopia. The indictment of Elizabeth Holmes, the company’s founder, and Ramesh Balwani, its former president and her erstwhile boyfriend, on charges of conspiracy and wire fraud can be viewed as evidence that the company was built on little more than a pack of lies.

But proving a criminal case, despite the current narrative, is not always as easy as it first appears. read more »

Citigroup Agrees to Pay $100 Million Over State Libor Probes

Citigroup Inc. agreed to pay a combined $100 million to 42 U.S. states to resolve a probe into fraudulent conduct tied to interest-rate manipulation that affected financial instruments worth trillions of dollars.

The settlement was announced Friday by several of the states, who alleged Citigroup misrepresented the integrity of the Libor benchmark to state and local governments, not-for-profit organizations and institutional trading counterparties, sometimes to protect the bank’s own reputation.

“Our office has zero tolerance for fraudulent or manipulative conduct that undermines our financial markets,” New York Attorney General Barbara Underwood said in a statement. “Financial institutions have a basic responsibility to play by the rules -- and we will continue to hold those accountable who don’t.”

The accord is the latest development in probes by governments around the globe into manipulation of benchmark interest rates, one of the key scandals that led to a cultural overhaul of the industry over the past decade. Global fines have topped $9 billion. In October, Deutsche Bank paid 45 states $220 million in penalties and disgorgements to resolve U.S. and U.K. probes. read more »

JPMorgan Is Fined $65 Million for Trying to Rig Benchmark Rate

JPMorgan Chase & Co. agreed to pay $65 million to settle a U.S. regulator’s allegations that its traders attempted to manipulate a benchmark for interest-rate derivatives, making it the latest bank fined in a years-long investigation.

A JPMorgan swaps trader tried to “muscle” what’s known as ISDAfix, which helps determine the value of trillions of dollars of derivatives, the Commodity Futures Trading Commission said in a Monday statement. Among traders, it was common knowledge that they could move prices with some openly joking about it, according to the regulator.

“This matter is one in a series of CFTC actions that clearly demonstrates the commission’s unrelenting commitment to root out manipulation from our markets and to protect those who rely on the integrity of critical financial benchmarks,” James McDonald, the CFTC’s head of enforcement, said in the statement.

JPMorgan, which didn’t admit or deny the regulator’s findings that its traders sought to rig ISDAfix from 2007 through 2012, joins Goldman Sachs Group Inc., Citigroup Inc., Barclays Plc and other lenders in paying fines. JPMorgan’s penalty is about a quarter of the $250 million that Citigroup agreed to pay in May 2016. read more »

Former Barclays trader accused of Euribor rigging was 'lowballing' whistleblower, court hears

A former Barclays trader on trial for allegedly rigging the Euro Interbank Offered Rate (Euribor) was a whistleblower for the lowballing scandal that rocked the banking industry, a court has heard.

"Lowballing" is a term used to describe the scandal that engulfed European and British banking when some banks during the credit crisis moved the submission of their rates for the benchmark well below where cash was trading.

Clare Sibson QC, who is acting for former trader Colin Bermingham, yesterday told Southwark crown court her client became concerned when several people at the bank said the European Central Bank (ECB) wanted him to push his rates down.

"In October 2008 when news reached him at the Barclays cash desk that, according to people Bloomberging him, the ECB was telling him to get his Euribor rate down, what did he do?" she asked. "He immediately contacted the ECB and he told them, 'I have been told this today by more than one person in my bank and I've said there's no way that you would ask me to do that.'"

Sibson went on to say that Bermingham contacted his own assistant to write to the European Banking Federation to "escalate" Barclays' concern that banks were putting in rates that were "dishonest, that were not justified by where cash was trading."