The Cyber-Cave

Reflections on the political, technological, cultural and economic trends of the world

Financial controversies



-Involvement in the Russian ‘mirror trades’
-Two former traders accused by American regulators of manipulating Libor.


-As of 2017 RBS is due to pay a total £6.7bn to cover the costs of the litigation with the Department of Justice (DOJ) for the misselling of residential mortgage-backed securities during the 2007-8 financial crisis. British taxpayers still have a 73% stake in RBS.
-In 2015 RBS admitted misselling loans to SMEs

-U.S prosecutors fined the bank for $1.5 bn for a Libor manipulation scheme (the bank also admitted manipulating the Euribor and Tibor). According to the prosecutors, the scheme involved bribing brokers (for $24,000) to help in manipulating the Libor rate. Prosecutors revealed that the manipulation was not only used for the traders to make money themselves, but that the manipulation also occurred when high-ranking employees of the bank tried to deliberately lower the rate during the financial crisis so that UBS would appear in a better shape to investors.

-The creation of 2 million bogus customer accounts so that employees would meet their sales targets (CEO John Stumpf was grilled in Congress).


-In 2015 a look at the diaries of key ECB officials showed that they attended meeting with important financial institution just before policy meetings. For example Benoît Cœuré and Yves Mersch met UBS employees the day before a policy meeting of the ECB’s rate-setting governing council on September 2014.
Mr Cœuré met BNP Paribas on September 4, the day in which  the ECB announced an interest rate cut and the future purchase of private sector assets.
Mr Cœuré met BlackRock employees the day before a policy meeting in March 2015, when the ECB unveiled the details of how it would carry out its QE program.
ECB offficials met with people of Algebris, Pimco and BNP Paribas on June 2015 at the eight of the Greek crisis at a time when the ECB was to decide on whether to maintain Greek banks afloat with emergency loans.
Suspicious arose on whether ECB officials disclosed confidential information.
-In 2015 it was revealed that Mr Cœuré had announced to a private audience of financiers in London that the ECB would ‘front-load’ its QE purchases in the following months. The ECB published the speech 12 hours later. As a result, there was a slide in the euro. An ECB statement attributed the delay to an ‘internal procedural error’. Unfair advantage may have been given to those attending the event with Mr Cœuré
-Richmond Federal Reserve President Jeffrey Lacker resigned over allegations that he disclosed confidential information about a 2012 FED meeting to an analyst of Medley Global Advisors. Confidential information was the leaked into a newsletter, thereby giving unfair advantage to some investors.

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