Britain's markets regulator is seeking to fine former Deutsche Bank AG trader Christian Bittar about £10 million ($17 million) for trying to rig benchmark interest rates, its largest ever penalty against an individual, said a person with knowledge of the situation.
The Financial Conduct Authority (FCA) notified Bittar in recent weeks that it intends to penalise him for attempting to manipulate the euro interbank offered rate, said the person, who asked not to be identified because the notice is confidential.
The penalty would dwarf the $9.6 million imposed on Rameshkumar Goenka, a Dubai-based investor, for manipulating stocks in London, the regulator's biggest to date. The FCA has said it's preparing to fine at least seven other traders it didn't identify for their roles in trying to rig the London interbank offered rate or similar benchmarks. At least two might be fined more than £1 million each, according to people with knowledge of the talks.
The proposed punishment "speaks volumes about the regulator's focus on robust deterrence," said Simon Hart, a lawyer at London-based RPC LLP who isn't involved in the case. The FCA has had "a longstanding desire to target more senior individuals within regulated firms".
Bittar is able to appeal the planned penalty to the Regulatory Decisions Committee, an internal FCA advisory panel made up of industry figures including lawyers and accountants, and could turn to the courts if he loses in that bid.
Appealing fines
The appeal process can take years to conclude, as seen in the case of Ian Hannam, once a top JPMorgan Chase & Co banker. Last month, he lost a bid to overturn a 2012 fine by the regulator, though the court agreed to review the size of his £450,000 penalty.
Bittar, who is based in Singapore and works for hedge fund Bluecrest Capital Management LLP, declined to comment on the penalty.
Deutsche Bank "is cooperating in the various regulatory investigations" in relation to Libor, Kathryn Hanes, a spokeswoman for the bank in London, said. She declined to comment on the fine.
Chris Hamilton, an FCA spokesman, and a representative for Bluecrest in London declined to comment.
Deutsche Bank was one of six to be fined in December by the European Commission for rigging Euribor, the benchmark money-market rate for the euro, and yen Libor, which reflects how much banks charge each other for loans in the Japanese currency. German markets regulator Bafin said last month that it expects to conclude its report into Libor manipulation in the middle of the year.
Interbank rates
Bittar, 42, was one of the bank's best-paid traders before he was dismissed in December 2011 after the Frankfurt-based lender claimed he had colluded with a counterpart at Barclays Plc to manipulate rates to boost the value of his trades, people with knowledge of the matter said last year. He lost about euro 40 million in bonuses after he was fired, the people said.
At least nine financial firms including Deutsche Bank and Barclays have been fined more than $6 billion in the last two years for manipulating Euribor or similar benchmarks.
Libor, Euribor and other interbank offered rates gauge banks' estimated cost of borrowing over different periods of time. Libor is the benchmark interest rate for more than $360 trillion of securities ranging from mortgages to student loans.
