Royal Bank of Scotland traders laughed and counted their profits as they rigged Libor interest rates and dubbed the London market a cartel, according to conversations published by regulators on Wednesday.
"Our 6m fixing move the entire fixing, hahaha," a Japanese yen derivatives trader boasted to another trader, according to documents released by British and U.S. regulators on Wednesday.
In another exchange in August 2007, a senior RBS yen trader said: "It's just amazing how libor fixing can make you that much money … it's a cartel now in london."
The conversations were published after RBS was fined $612-million (U.S.) to settle U.S. and U.K. regulatory charges of misconduct, manipulation, attempted manipulation and false reporting of yen, Swiss franc and dollar-denominated Libor. It is the third bank to be nailed for rigging benchmark rates.
The revelation in e-mails and on computer chat systems sent by RBS traders to colleagues and traders at other banks are an echo of the embarrassing message chains seen at Barclays Bank PLC and UBS AG, which settled Libor manipulation cases last year.
They have been seized on by politicians and an angry public as evidence of a brazen attitude to price fixing, with traders calling each other "superman" or "a hero" for the manipulation, and promising each other rewards.
Regulators said RBS allowed at least 21 derivatives traders and primary submitters in London, Tokyo, the U.S. and Singapore to fiddle rates between 2006 and 2010.
The traders knew they risked regulatory scrutiny. But they underestimated the authorities.
"At the moment the FED are all over us about libors," a yen trader said in November 2010.
A senior yen trader replied: "dun think anyone cares the JPY libor."
RBS staff were not even unduly concerned when authorities started investigations. Some merely stopped overt written requests.
In November 2010, an RBS submitter told a trader he couldn't change the rate as requested. But in a phone call immediately afterward he noted he had to be careful as staff were not supposed to discuss Libor rates in print.
RBS traders promised everything from "sushi rolls from yesterday" to "lunch … for the whole desk" in exchange for favourable submissions, according to the U.S. Commodity Futures Trading Commission order.
"If u cud see ur way to a small drop there might be a steak in it for ya, haha," a broker said.
That had parallels with e-mails in the Barclays settlement, when one of its bankers was promised a bottle of Bollinger champagne as thanks for the rate-rigging.
Tom Hayes, a former UBS trader who has been charged with rigging rates, was again singled out on Wednesday in an electronic chat from April 2007. When he is told by an RBS trader that his fixing requests are being met, he says: "thx mate … in fact i owe you big time … that's beyond the call of duty!"
In other exchanges, some RBS traders promised love and others begged submitters to comply.
A Swiss franc trader told a submitter after a request for a high fix: "if u did that i would come over there and make love to you."
"PPPPLLLLLEEEEEAAAAASSSSEEEEEE," one trader asked a submitter in 2009 for a high three-month and low six-month submission. His request was granted.