Libor Fixing Scandal: Ex-Rabobank Trader Paul Robson Pleads Guilty in US
Libor Fixing Scandal: Ex-Rabobank Trader Paul Robson Pleads Guilty in USReuters

Briton Paul Robson has become the second former employee of Dutch-based lender Rabobank to admit guilt in the US for attempting to rig key interbank lending rates.

Robson pleaded guilty in a Manhattan count to being part of a scheme to fix the yen Libor rate in order to benefit trading positions between 2006 and 2011, after being charged by the US Department of Justice.

"The scope of the fraud was massive, but the scheme was simple," said Leslie Caldwell, who heads the Justice Department's criminal division.

"By illegally influencing the Libor rates, Robson and his co-conspirators rigged the markets to ensure that their trades made money."

What is Libor?

Libor valuations directly influence the value of trillions of dollars of financial deals between banks and other institutions.

The benchmark reference rates are used in euro, US dollar and British sterling over-the-counter interest rate derivatives contracts and exchange-traded interest rate contracts.

In June this year, ex-Rabobank trader, Takayuki Yagami, also pleaded guilty to one count of conspiring to commit wire fraud and bank fraud in relation to Yen Libor manipulation.

The plea was confirmed before the same US District Judge as Robson's, Jed Rakoff, in Manhattan.

In October last year, Rabobank's chief executive Piet Moerland quit earlier than expected after the Dutch lender was fined €774m (£645m, $1.1bn) by US and other British and European authorities for its role in the manipulation of the key interbank lending rate Libor.

Out of the total amount, the Dutch lender paid a €236m criminal fine to the DoJ and entered into a deferred prosecution agreement to resolve the charges.

The Dutch lender, a co-operative founded in the late 19th century as a farmers' bank, received a formal request from the Dutch Ministry of Security and Justice, for information linked to the ongoing probes into its possible involvement in the manipulation of Libor, in October 2012.