FCA fines and bans former Deutsche Bank Libor trader

The UK Financial Conduct Authority fined Guillaume Adolph £180,000 ($250,000) and permanently banned him from the financial services industry.

Adolph worked at Deutsche Bank as a short-term interest rate derivatives trader. He traded Swiss Franc and Japenese Yen LIBOR products.

He was the primary Japanese Yen submitter for Deutsche Bank.

Libor, or the London Interbank Offered Rate, is the benchmark for short term interest rates for high-demand currencies around the world. It’s used to set interest rates for trillions of dollars of mortgages, credit cards, and student loans, among other financial products.

Libor is set by averaging rates submitted by certain banks.

The FCA said Monday that between July 2008 and March 2010, Adolph asked Deutsche Bank’s Swiss Franc Libor submitters to adjust their submissions to benefit Adolph’s trading positions.

He also took his own trading positions into account when acting as Deutsche Bank’s primary Yen submitter.

And he agreed with a trader at another Libor panel bank to make Yen Libor submissions which took into account that trader’s requests.

The FCA “determined that he is not a fit and proper person to perform any regulated financial activity.”

Adolph’s misconduct “threatened the integrity of important benchmarks,” the FCA said. 

“He should have no further role in the financial services industry.”

Adolph’s lawyers, BCL Solicitors, told Reuters the “FCA does not conclude or even suggest that he was dishonest.”

“As the FCA has previously found, the blame for the problems associated with Libor within Deutsche Bank lies firmly at the door of the bank,” BCL said.

U.S. and British authorities fined Deutsche Bank $2.5 billion in 2015 for allegedly rigging Libor.

Last week Deutsche Bank paid $240 million to settle private U.S. antitrust litigation based on allegations the bank illegally manipulated Libor. The plainitffs included the city of Baltimore and Yale University.

The FCA said Monday it discounted Adolph’s fine by 10 percent because he agreed to settle the investigation early.

The FCA’s Final Notice against Guillaume Adolph is here.

___

Richard L. Cassin is the publisher and editor of the FCPA Blog.