Three arrested in UK over Libor rate fixing scandal
According to Britain's Serious Fraud Office (SFO), the three British men are aged 33, 41 and 47 and are all currently living in the United Kingdom. They have been taken to a London police station for questioning. The arrests come as the Serious Fraud Office, with the assistance of the City of London Police, executed search warrants at three residential premises in Surrey and Essex on Tuesday.While the SFO didn't identify the men, one of them is rumored to be Thomas Hayes, a former trader at UBS and Citigroup Inc. , the Wall Street Journal reports. Terry Farr, an employee at the British brokerage firm R.P. Martin Holdings Ltd. in London, is also said to be among those arrested on Tuesday. Farr was reportedly on leave from the firm prior to his detention.The Fraud Office opened its investigation in July after Barclays was fined $435 million by American and British agencies over alleged Libor interest rate manipulating.The Fraud Office opened its investigation in July after Barclays was fined $435 million by American and British agencies over alleged Libor interest rate manipulation. Barclays is the only bank to have admitted to attempting to rig Libor, with the scandal prompting the bank’s chief executive Bob Diamond to step down. Currently over a dozen global banks, including Citigroup, HSBC, Credit Suisse and Deutsche Banks are under investigation in the UK, US, Japan and several other countries for allegedly providing false figures on borrowing rates between 2005 and 2009.Libor was invented by the British Bankers’ Association (BBA) in 1986 as an average rate for interbank lending. It is generated through a daily survey of 16 prime banks and calculated for 10 currencies. Libor influences the costs of several financial instruments, including corporate loans, inflation swaps, home mortgages and currencies.