Two Bankers Indicted In Libor-Manipulation Case -- Update

By Austen Hufford Features Dow Jones Newswires

Two bankers were indicted in the U.S. on Thursday on allegations that they manipulated a key benchmark interest rate while at French lender Société Générale SA, in the latest U.S. attempt to prosecute alleged participants in a multibillion-dollar scandal that roiled global markets.

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The U.S. Justice Department accused Danielle Sindzingre and Muriel Bescond of instructing their subordinates to submit inaccurately low figures that were then used to calculate Libor, or the London interbank offered rate, according to the indictment in U.S. District Court in Brooklyn.

The actions, which are alleged to have happened between May 2010 and October 2011, caused more than $170 million in harm to global financial markets because the false information affected transactions tied to Libor, according to the indictment.

The two bankers were charged with one count of conspiring to transmit false reports concerning market information that tends to affect a commodity and four counts of transmitting false reports.

Ms. Sindzingre, Ms. Bescond and the bank didn't respond to a request for comment. It isn't immediately clear if the women still work for Société Générale.

In July, a federal appeals-court panel overturned the convictions of two former Rabobank traders in the scandal, saying the defendants' Fifth Amendment right against self-incrimination had been violated.

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Libor is calculated every working day by polling major banks on their estimated borrowing costs. The rate was used to price futures contracts, interest rate swaps and other financial products world-wide. Its integrity has been called into question following a rate-rigging scandal where traders at numerous banks were able to nudge it up or down by submitting false data.

In the wake of the scandal, a top U.K. regulator said in July that it would phase out the rate, which is used to set the price of trillions of dollars of loans and derivatives across the world.

Write to Austen Hufford at austen.hufford@wsj.com

Two bankers were indicted in the U.S. on allegations that they manipulated a key benchmark interest rate while at French lender Société Générale SA, in the latest U.S. attempt to prosecute alleged participants in a multibillion-dollar scandal that roiled global markets.

The U.S. Justice Department accused Danielle Sindzingre and Muriel Bescond of instructing their subordinates to submit inaccurately low figures that were then used to calculate the London interbank offered rate, or Libor, according to Thursday's indictment in U.S. District Court in Brooklyn.

The actions, which are alleged to have happened between May 2010 and October 2011, caused more than $170 million in harm to global financial markets because the false information affected transactions tied to Libor, according to the indictment.

The two bankers were charged with one count of conspiring to transmit false reports concerning market information that tends to affect a commodity and four counts of transmitting false reports.

Ms. Sindzingre, Ms. Bescond and the bank didn't respond to a request for comment. The women remain employed at Société Générale, a Justice Department spokeswoman said Thursday.

In July, a federal appeals-court panel overturned the convictions of two former Rabobank traders in the scandal, saying the defendants' Fifth Amendment right against self-incrimination had been violated.

Libor is calculated every working day by polling major banks on their estimated borrowing costs. The rate was used to price futures contracts, interest-rate swaps and other financial products world-wide. Its integrity has been called into question after a rate-rigging scandal where traders at numerous banks were able to nudge it up or down by submitting false data.

In the wake of the scandal, a top U.K. regulator said in July that it would phase out the rate, which is used to set the price of trillions of dollars of loans and derivatives across the world.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

August 24, 2017 18:49 ET (22:49 GMT)