"Market participants cannot turn a blind eye to what the community, through its laws and regulations, expects nor apply their own, lower standards."
The FCA has fined former RBS interest rate derivatives trader, Neil Danziger, £250,000 and banned him from performing any function in relation to any regulated financial activity.
The regulator found that Danziger was "knowingly concerned in RBS’s failure to observe proper standards of market conduct... acted recklessly and lacks integrity".
Its investigation found that between 14 February 2007 and 22 November 2010, Danziger routinely made requests to RBS’s primary submitters, intending to benefit the trading positions for which he and other derivatives traders were responsible, and obtained a broker’s assistance to attempt to manipulate the JPY LIBOR submissions of other banks.
In addition, between 19 September 2008 and 25 August 2009, Danziger entered into 28 wash trades – risk free trades, with the same party, in pairs that cancelled each other out and for which there was no legitimate commercial rationale. The purpose of these wash trades was to make or facilitate brokerage payments to two firms of brokers in recognition of his receipt of personal hospitality.
The FCA says he 'deliberately closed his mind to the risk that his actions were improper'.
In 2014, the FCA issued Mr Danziger with a Warning Notice, but proceedings were stayed due to the ongoing criminal investigation by the Serious Fraud Office into certain individuals who formerly worked at RBS.
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.”
Danziger’s lawyer Ben Rose commented: “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.”