Dutch nix demand for Rabobank Libor scandal prosecution

GMT 17:19 2015 Tuesday ,19 May

Arab Today, arab today Dutch nix demand for Rabobank Libor scandal prosecution

Rabobank paid fines
The Hague - AFP

A Dutch court on Tuesday rejected a request to prosecute Rabobank over the Libor scandal that rocked the financial world, saying the bank had already payed a massive multi-million euro fine.

A group of Rabobank clients named the Justicia Distribuva Foundation filed a demand for prosecution after Dutch public prosecutors dropped the case against the Netherlands' second largest bank in the rate-rigging scandal.

Rabobank was fined a total of 774 million euros ($867 million) by financial regulators in three countries in October 2013 and paid the fine to avoid prosecution.

"Noting the payments... globally, of which 70 million went to Dutch prosecuting authorities, the court sees no further value to the (new) request for prosecution," The Hague's appeals court said in a statement.

"The bank paid the fine, those who no longer work at the bank were prosecuted abroad and Dutch prosecutors have dropped the case against managers and those still working at Rabobank," the court added.

Libor, or the London InterBank Offered Rate is used to peg millions of interest rate-sensitive contracts and loans around the world and is fixed in London.

It serves as a reference for about $360 trillion in transactions.

However, the system has been found to be open to abuse, with some traders lying about borrowing costs to boost trading positions or make their bank seem more secure.

Rabobank had for almost six years between May 2005 and January 2011 allowed money market traders to manipulate Libor submissions to benefit foreign currency trading positions, the British Financial Conduct Authority said in October 2013.

A number of banks were handed massive fines in the wake of the Libor scandal.

The latest is Germany's Deutsche Bank, fined $2.5 billion last month after admitting its guilt in the multi-bank conspiracy to rig Libor interest rates.

Previously the rate was fixed by a multi-bank panel.

After the rigging scandal emerged, the British authorities gave the responsibility to market operator NYSE Euronext.


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