We knew something was very wrong back in January 2009. We knew the rabbit hole went deep. We had no idea just how deep.... It goes very, very, very deep.

From the FSA' breakdown of Barclays traders caught in the act of manipulation:

On Friday, 10 March 2006, two US dollar Derivatives Traders made email requests for a low three month US dollar LIBOR submission for the coming Monday: i. Trader C stated “We have an unbelievably large set on Monday (the IMM). We need a really low 3m fix, it could potentially cost a fortune. Would really appreciate any help”; ii. Trader B explained “I really need a very very low 3m fixing on Monday – preferably we get kicked out. We have about 80 yards [billion] fixing for the desk and each 0.1 [one basis point] lower in the fix is a huge help for us. So 4.90 or lower would be fantastic”. Trader B also indicated his preference that Barclays would be kicked out of the average calculation; and iii. On Monday, 13 March 2006, the following email exchange took place: Trader C: “The big day [has] arrived… My NYK are screaming at me about an unchanged 3m libor. As always, any help wd be greatly appreciated. What do you think you’ll go for 3m?” Submitter: “I am going 90 altho 91 is what I should be posting”. Trader C: “[…] when I retire and write a book about this business your name will be written in golden letters […]”. Submitter: “I would prefer this [to] not be in any book!”

More:

The number of requests and the period of time over which they were made indicate that the Derivatives Traders made requests on a routine basis. Specific emails also indicate the requests were made regularly. For example, the following email exchange took place on 27 May 2005:

Submitter:“Hi All, Just as an FYI, I will be in noon’ish on Monday […]”.

Trader B: “Noonish? Whos going to put my low fixings in? hehehe”

Submitter: “[…] [X or Y] will be here if you have any requests for the fixings”.

More:

In response to a request from Trader C for a high one month and low three month US dollar LIBOR submission on 16 March 2006, a Submitter responded: “For you…anything. I am going to go 78 and 92.5. It is difficult to go lower than that in threes, looking at where cash is trading. In fact, if you did not want a low one I would have gone 93 at least”.

More:

Trader C requested low one month and three month US dollar LIBOR submissions at 10:52 am on 7 April 2006 (shortly before the submissions were due to be made); “If it’s not too late low 1m and 3m would be nice, but please feel free to say “no”... Coffees will be coming your way either way, just to say thank you for your help in the past few weeks”. A Submitter responded “Done…for you big boy”.

More:

On 6 August 2007, a Submitter even offered to submit a US dollar rate higher than that requested:

Trader F: “Pls set 3m libor as high as possible today”

Submitter: “Sure 5.37 okay?”

Trader F: “5.36 is fine”

More:

On Thursday 14 December 2006, Trader F emailed a Submitter, requesting a low three month US dollar LIBOR submission for the following Monday, 18 December 2006; “For Monday we are very long 3m cash here in NY and would like the setting to be set as low as possible…thanks”. The Submitter instructed another Submitter to accommodate the request; “You heard the man” and confirmed to Trader F “[X] will take notice of what you say about a low 3 month”. Two seconds later, that Submitter sent himself an electronic calendar reminder to make a low three month submission at 11 am on Monday 18 December 2006: “USD 3mth LIBOR DOWN”.

It just gets better:

For example, on 26 October 2006, an external trader made a request for a lower three month US dollar LIBOR submission. The external trader stated in an email to Trader G at Barclays “If it comes in unchanged I’m a dead man”. Trader G responded that he would “have a chat”. Barclays’ submission on that day for three month US dollar LIBOR was half a basis point lower than the day before, rather than being unchanged. The external trader thanked Trader G for Barclays’ LIBOR submission later that day: “Dude. I owe you big time! Come over one day after work and I’m opening a bottle of Bollinger"



And better:

For example, on 6 September 2006, an external trader at another bank (Panel Bank 1) contributing EURIBOR submissions sent an instant message to Trader E at Barclays requesting a low one month submission: “I seriously need your help tomorrow on the 1mth fix”. The next day, Trader E passed on the request to Barclays’ Submitters, blind copying in the external trader.

And better:

On 28 February 2007, Trader B made a request to an external trader in relation to three month US dollar LIBOR “duuuude… whats up with ur guys 34.5 3m fix…tell him to get it up!!” The external trader responded “ill talk to him right away”.

And other banks:

Barclays’ Submitters also received 11 requests for sterling LIBOR submissions from an external trader at another bank (who had previously worked at Barclays). These requests were not taken into account.

And truly stunning:

Trader E communicated with traders at Panel Banks 1, 2 and 6 in advance of the IMM date. For example on 12 February 2007, Trader E stated in an instant message with a trader at Panel Bank 6:

“if you know how to keep a secret I’ll bring you in on it […]

we’re going to push the cash downwards on the imm day […]

if you breathe a word of this I’m not telling you anything else […]

I know my treasury’s firepower…which will push the cash downwards […]

please keep it to yourself otherwise it won’t work”.

And, in the end, the punchline:

Various instant messages exchanged after the final benchmark rates were published on 19 March 2007 indicated that the traders involved considered that their strategy had been successful. Trader E commented to the external trader at Panel Bank 6 “this is the way you pull off deals like this chicken, don’t talk about it too much, 2 months of preparation […] the trick is you must not do this alone […] this is between you and me but really don’t tell ANYBODY”.

Absolutely sickening. Read the full thing here.

Our advice to anyone who had an adjustable rate mortgage in the period between 2005 and today: speak to a lawyer immediately about suing the living feces out of Barclays, and all other banks who crawl out of the woodwork with purported settlements. Because due to their undisputed mark manipulation, it is absolutely safe to say that ARMs, which rely on Libor for interest rate formation, were grossly manipulated by the same idiot traders who left written evidence of their manipulation year after year. Now it is their turn to pay.