Two former senior managers at Société Générale have been
indicted by the US Department of Justice for their role in allegedly
manipulating London Interbank Offered Rate (Libor) rates.
Danielle Sindzingre and Muriel Bescond, 49 were charged in
the Eastern District of New York with one count of conspiring to transmit false
reports concerning market information that tends to affect a commodity, and
four counts of transmitting such false reports. Sindzingre was the global head
of treasury and Bescond was the head of treasury, Paris, at the bank.
According to the indictment, between approximately May 2010
and approximately October 2011, Sindzingre and Bescond knowingly instructed subordinates
on SocGen’s Paris treasury desk to submit inaccurately low Libor contributions
in an effort to make it appear that the bank was able to borrow money at more
favourable rates than it actually was.
“This was allegedly done with knowledge that the true rates
at which Société Générale was borrowing money were higher than the rates it was
submitting as part of the Libor calculation,” the DoJ says.
On numerous occasions, the false information submitted at
the direction of Sindzingre and Bescond altered the day’s final US dollar Libor
calculation, thus affecting all financial transactions tied to rate fixing on
that day, the indictment alleges. Among the allegedly affected financial
products were CME Eurodollar futures.
In total, DoJ says it is estimated that the defendants’ alleged
misconduct caused over $170 million in harm to the global financial markets.
“The allegations in today’s indictment suggest complete and
total disregard for the integrity of the financial markets and for innocent consumers
and everyday people whose personal finances hinge on the interest rates they
pay on various loans,” says acting assistant attorney general Kenneth Blanco of
the DoJ’s Criminal Division. “Cases like this demonstrate the crucial role of
the Department in protecting people and their hard earned money, securing our
financial markets for economic growth and prosperity, and for fighting white
collar crime to protect our nation from bad actors, wherever they may reside.”
Eastern District of New York acting US attorney Bridget Rohde,
adds, “The integrity of our global financial markets relies upon each of its participants
providing complete and accurate information. As alleged, the defendants acted
in contravention of this principle and the laws designed to uphold it by
causing their employer, Société Générale, to submit falsified USD Libor rates,
which in turn effected financial transactions across markets worldwide. We will
continue to vigorously root out and prosecute such crimes.”
Assistant director in charge Andrew Vale of the FBI’s
Washington Field Office, says, “Fraudulently manipulating the Libor and
deceiving the financial market to affect world-wide financial transactions have
far reaching consequences, and such criminal activity will not be tolerated. Today’s
indictment should stand as a warning that the FBI remains committed to holding
those accountable who flout the law in their attempts to take advantage of
international financial markets.”