Belfast Telegraph

RBS fined £68m over US financial trading manipulation

Royal Bank of Scotland (RBS) has been hit with an 85 million dollar (£68 million) fine by US authorities over financial trading manipulation.

The banking giant has been accused by the US Commodity Future Trading Commission (CFTC) of attempting to manipulate the US Dollar International Swaps and Derivatives Association Fix (ISDAFIX) - a global benchmark reference in a range of interest rate products.

The news comes a week after RBS set aside another 3.8 billion US dollars (£3.1 billion) ahead of an expected fine from US authorities to cover a potential settlement over its alleged role in the mis-selling of toxic mortgage-backed securities before the financial crisis.

Aitan Goelman, director of the CFTC's division of enforcement, said it was the fourth time the organisation had taken enforcement action over attempts to manipulate the ISDAFIX.

"These actions, and the CFTC's previous cases against those who sought to corrupt the Libor and foreign exchange benchmark rates, make clear that the Commission takes very seriously its role in ensuring the integrity of any and all benchmarks used in our markets."

RBS traders tried to boost derivative positions held by the bank by attempting to manipulate the US dollar ISDAFIX over five years between January 2007 and March 2012.

The Commission found that traders had joked about their efforts to try and move the US dollar ISDAFIX in a string of emails and audio recordings.

During the exchanges, one RBS trader turned a news story about hedge fund Amaranth being charged by the CFTC with manipulating natural gas futures into a joke about the actions of RBS traders.

In an email, the trader wrote: " Amaranth tried to Manipulate Gas Prices, CFTC Says...

"[Swaps Trader 1] tried for manipulating ISDAFIX3 settlement . . .

"[Swaps Trader 1] is on a recorded line shouting, "GET THE NINES DOWN [Broker], GET THE NINES DOWN, NOW NOW NOW".

"RBS could not be reached for comment."

The CFTC said RBS had been told to shore up its controls and procedures to "ensure the integrity" of interest-rate swap benchmarks.

Ross McEwan, RBS chief executive, strongly condemned the traders' actions and said it was an example of "past misconduct".

" These findings make for uncomfortable reading and we have already taken significant steps to make sure this kind of behaviour cannot happen again," he said.

"The culture and structure of RBS has changed dramatically in recent years; I'm pleased we can put this issue behind us and concentrate on the important job of building a bank that is fully focused on the best interests of its customers."

The CFTC has handed out penalties worth 5.29 billion US dollars (£4.2 billion) following investigations into the manipulation of global benchmark rates.