Lloyds Said to Suspend Three Traders After Libor Fines

Jul 31, 2014 7:07 am ET

(Updates with third trader Dewan in second paragraph.)

July 31 (Bloomberg) -- Lloyds Banking Group Plc suspended at least three traders after it settled with regulators and the Bank of England for rigging benchmarks including Libor, a person with knowledge of the matter said.

The U.K.’s biggest mortgage lender suspended traders Clive Jones, John Argent and Udit Dewan in London, said the person, asking not to be identified as the details are private. Jones, Dewan and Argent didn’t respond to e-mails seeking comment or calls to their London offices.

The U.K. bank, rescued by taxpayers during the financial crisis, will pay 105 million pounds ($177 million) to Britain’s Financial Conduct Authority, $105 million to the U.S. Commodity Futures Trading Commission and $86 million to the U.S. Department of Justice. It also paid 7.8 million pounds in redress to the BOE after its traders’ actions cut the fees banks paid for an aid program of which Lloyds was one of the biggest beneficiaries.

Lloyds, based in London, said it compensated the BOE after four traders manipulated the BBA Sterling Repo Rate from April 2008 to September 2009.

“It is group policy not to comment on individual employees,” said Lloyds in response to a Bloomberg query yesterday.

Libor Fine

Jones, who joined Lloyds Bank in 1977, was appointed global director of money markets following the merger with HBOS Plc in 2008, according to the lender’s website. Argent returned to work in mid-2012 after being suspended that year amid a probe of potential manipulation of the London interbank offered rate, people briefed on the matter said at the time.

Lloyds’s 226 million-pound fine announced this week is the fifth-biggest of the seven firms to reach settlements with U.S. and U.K. regulators probing how traders colluded to rig Libor and related benchmarks to profit from their own derivatives bets. UBS AG paid the most at $1.5 billion, including an agreement with Swiss regulators, while Barclays Plc, the first to settle, paid $451 million and Royal Bank of Scotland Group Plc about $612 million, according to data compiled by Bloomberg.

Lloyds received a 20 billion-pound bailout during the financial crisis, and taxpayers still own 25 percent of the lender. Chief Executive Officer Antonio Horta-Osorio’s efforts to return the lender to full private ownership are being hampered by past misconduct, including selling insurance on loans to clients who didn’t need it.

Lloyds posted a 32 percent gain in first-half earnings today after bad loans fell, and said it’s setting aside 1.1 billion pounds for legal redress.

“It’s as shocking to us as it is to you,” Horta-Osorio, 50, said on a conference call today, commenting on Libor rigging. “We view the actions of those individuals as totally unacceptable and condemn them without reservation.”

--With assistance from Stephen Morris and Richard Partington in London.