Libor Probe Marks Financial Fraud Focus for Washington FBI Team
The FBI’s Washington field office, long known for its work on terrorism and public corruption, has taken a central role in the U.S. probe of the manipulation of interest rates that has entangled banks around the world.
The office is conducting the U.S. investigation into the rigging of benchmarks including the London Interbank Offered Rate, and its work up to this point has led in part to two international resolutions, including the $1.5 billion settlement with UBS AG in December and charges against two of the bank’s former traders.
The settlement, which included a guilty plea from the company’s Tokyo subsidiary, and investigations into banks and traders across the globe underscore how attacking “major fraud” has become a priority for the office, Timothy Gallagher, the head of the Washington criminal division who is overseeing the probe, said in an interview.
“We’ve got an enormous amount of resources devoted to this,” said Gallagher, who took the helm of the criminal division in October after a stint as the chief of the Financial Crimes Section at FBI headquarters.
The Federal Bureau of Investigation’s role at the center of financial fraud cases isn’t new, as the New York office has spearheaded some of the largest corporate and securities fraud cases in history. Still, the Washington office’s emergence, bolstered by its two financial fraud squads and relationship with Justice Department lawyers leading the probe, has pushed it to the forefront of Wall Street’s radar.
Deutsche in talks to settle U.S. power manipulation case: FERC
an 11 (Reuters) – U.S. energy market regulators are in settlement talks with Deutsche Bank over allegations the bank manipulated the California electricity market, staff of the Federal Energy Regulatory Commission said in a filing Friday.
FERC proposed Deutsche pay a $1.5 million fine and disgorge of $123,198 in alleged ill-gotten profits last year.
Deutsche Bank has disputed FERC’s allegation that it manipulated the market by deliberately losing money on physical transations to profit in derivative markets.
BANKS SEEK NSA HELP AMID ATTACKS ON THEIR COMPUTER SYSTEMS
Major U.S. banks have turned to the National Security Agency for help protecting their computersystems after a barrage of assaults that have disrupted their Web sites, according to industry officials.
The attacks on the sites, which started about a year ago but intensified in September, have grown increasingly sophisticated, officials said. The NSA, the world’s largest electronic spying agency, has been asked to provide technical assistance to help banks further assess their systems and to better understand the attackers’ tactics.
The cooperation between the NSA and banks, industry officials say, underscores the government’s fears about the unprecedented assault against the financial sector and is part of a broader effort by the government to work with U.S. firms on cybersecurity. Nonetheless, the assistance is likely to dismay privacy advocates, who say that the NSA has no business peering inside private companies’ systems, even if for the strict purpose of improving computer security.
U.S. intelligence officials said last year they believe the attacks against the banks and other companies have been carried out by Iran, although some experts have cautioned that it is difficult to accurately determine who is behind them.
“If you look at their actions, they’re taking this very seriously. The government is stepping up to the plate,” said one bank official, who like most interviewed for this article spoke on the condition of anonymity because he was not authorized to speak for the record.
The NSA declined to comment for this article beyond a statement saying that the agency provides assistance “in full compliance with all applicable laws and regulations.”