Showing posts with label probe. Show all posts
Showing posts with label probe. Show all posts

Monday, June 4, 2012

US Conducting Lending Rate Manipulation Probe: Source

The U.S. Justice Department is conducting a criminal probe into whether the world's biggest banks manipulated a global benchmark rate that is at the heart of a wide range of loans and derivatives, from trillions of dollars of mortgages and bonds to interest rate swaps , a person familiar with the matter said.

While the Justice Department's inquiry into the setting of the London interbank offered rate [cnbc explains] , or Libor, was known, the criminal aspect of the probe was not.

A criminal inquiry underscores the serious nature of a worldwide investigation that includes regulators and law-enforcement agencies in the United States, Japan, Canada and the UK.

Several major global banks, including Citigroup, HSBC, Royal Bank of Scotland and UBS, have disclosed that they have been approached by authorities investigating how Libor is set.

Global Banks Approached by AuthoritiesNo bank or trader has been criminally charged in the Libor probes. It wasn't clear which banks or traders the Justice Department is targeting in its criminal probe.

The Justice Department and the banks declined to comment.

Libor is set everyday in London for 10 currencies for a range of maturities. The rate is supposed to reflect the rate at which banks lend to one another. Dollar Libor, for example, is calculated after 18 banks submit the costs to borrow dollars.

The rate underpins $10 trillion in loans to consumers and companies and another $350 trillion in derivatives. In the derivatives market, Libor is used in the pricing of the massive and popular interest-rate swaps market, where two parties swap floating- and fixed-rate interest payments. Libor typically is used as the basis for the floating rate.

The investigations are examining whether traders at the banks tried to influence whether the rate went up or down. A change in the rate could mean a windfall of tens of millions of dollars if a trader has bet correctly on the direction of Libor.

Swiss bank UBS is playing a key role in the probes because it agreed to come forward and cooperate in the inquiries.

The bank said in a regulatory filing it has been granted conditional leniency or conditional immunity by the antitrust division of the Justice Department and the Swiss Competition Commission.

In recent months, probes in Japan and Canada have focused on a group of interest-rate traders who attempted to manipulate yen Libor, according to court and regulatory documents.

In Ontario Superior Court, a Canadian antitrust regulator said that a "cooperating party" has provided information on how the alleged manipulation took place. The cooperator is UBS, people familiar with the situation said previously.

The Canadian documents provide examples of how a trader at the cooperating bank contacted traders at banks such as RBS to try and influence Libor.

Copyright 2012 Thomson Reuters. Click for restrictions.

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Monday, March 5, 2012

Probe finds Japan withheld risks of nuke disaster

TOKYO (AP) — The Japanese government withheld information about the full danger of last year's nuclear disaster from its own people and from the United States, putting U.S.-Japan relations at risk in the first days after the accident, according to an independent report released Tuesday.

The report, compiled from interviews with more than 300 people, delivers a scathing view of how leaders played down the risks of the meltdowns at the Fukushima Dai-ichi nuclear plant that followed a massive March 11 earthquake and tsunami.

The report by the private Rebuild Japan Initiative Foundation also paints a picture of confusion during the days immediately after the accident. It says the U.S. government was frustrated by the scattered information provided by Japan and was skeptical whether it was true.

The U.S. advised Americans to leave an area within 50 miles (80 kilometers) of the plant, far bigger than the 12-mile (20-kilometer) Japanese evacuation area, because of concerns that the accident was worse than Japan was reporting.

The misunderstandings were gradually cleared up after a bilateral committee was set up on March 22 and began regular meetings, according to the 400-page report.

The report, compiled by scholars, lawyers and other experts, credits then-Prime Minister Naoto Kan for ordering Tokyo Electric Power Co., the utility running the plant, not to withdraw its staff and to keep fighting to bring it under control.

TEPCO's president at the time, Masataka Shimizu, called Kan on March 15 and said he wanted to abandon the plant and have all 600 TEPCO staff flee, the report said. That would have allowed the situation to spiral out of control, resulting in a much larger release of radiation.

A group of about 50 workers was eventually able to bring the plant under control.

TEPCO, which declined to take part in the investigation, has denied it planned to abandon Fukushima Dai-ichi. The report notes the denial, but says Kan and other officials had the clear understanding that TEPCO had asked to leave.

But the report criticizes Kan for attempting to micromanage the disaster and for not releasing critical information on radiation leaks, thereby creating widespread distrust of the authorities among Japanese.

Kan's office did not immediately respond to requests for comment on the report.

Kan acknowledged in a recent interview with The Associated Press that the release of information was sometimes slow and at times wrong. He blamed a lack of reliable data at the time and denied the government hid such information from the public.

It will take decades to fully decommission Fukushima Dai-ichi. Although one of the damaged reactor buildings has been repaired, others remain in shambles. A group of journalists, including a reporter from The Associated Press, were given a tour of the plant on Tuesday.

Workers have used tape to mend cracks caused by freezing weather in plastic hoses on temporary equipment installed to cool the hobbled reactors.

"I have to acknowledge that they are still rather fragile," plant chief Takeshi Takahashi said of the safety measures.

The area is still contaminated with radiation, complicating the work. It already has involved hundreds of thousands of workers, who have to quit when they reach the maximum allowed radiation exposure of 100 millisieverts a year.

The report includes a document describing a worst-case scenario that Kan and the chief of the Japan Atomic Energy Commission secretly discussed two weeks after the disaster.

That scenario involved the possibility of more nuclear fuel rods burning, causing the release of more radiation and requiring the evacuation of a much wider region, including Tokyo.

The report also concludes that government oversight of nuclear plant safety had been inadequate, ignoring the risk of tsunami and the need for plant design renovations, and instead clinging to a "myth of safety."

"The idea of upgrading a plant was taboo," said Koichi Kitazawa, a scholar who heads the commission that prepared the report. "We were just lucky that Japan was able to avoid the worst-case scenario. But there is no guarantee this kind of luck will prevail next time."

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Associated Press writer Mari Yamaguchi in Okuma, Japan, contributed to this report.

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Follow Yuri Kageyama on Twitter at http://twitter.com/yurikageyama and Mari Yamaguchi at http://twitter.com/mariyamaguchi


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Sunday, February 26, 2012

India pledge over shooting probe

27 February 2012 Last updated at 04:15 GMT The Napoli registered Italian merchant vessel Enrica Lexie (L) is anchored off the harbour in the southern Indian city of Kochi February 16, 2012 The shooting incident has heightened diplomatic tensions between the two countries India will "not succumb to pressures from Italy" over an investigation into the fatal shooting of two fishermen by an Italian navy security team, a minister has said.

Defence Minister AK Antony said the probe was "moving in the right direction".

A court has remanded two members of the Italian team in custody for two weeks.

The incident in Kerala state sparked a major diplomatic row between the two countries.

Indian police have opened a murder inquiry into the incident, which took place off the coast of the southern state of Kerala earlier this month.

Italian officials said the Indian fishing boat had behaved aggressively and ignored warning shots from their ship, Enrica Lexie.

They said they opened fire after mistaking the fishermen for pirates. India said the fishermen were unarmed.

'Fair trial'

"The probe is in the right direction and we are not going to succumb to the pressures from Italy," Defence Minister AK Antony said on Sunday, after visiting the family of the dead fishermen.

"The Indian judiciary is independent and they can rightfully expect a fair trial here."

Mr Antony said the state government of Kerala had been "handling the case very strongly and powerfully".

"It has full support [from the federal government] for pursuing the case," he said.

Last week, a court sent the Italian marines - identified as Massimiliano Latorre and Salvatore Girone - to judicial custody for 14 days.

Italy insists that its personnel cannot be charged under Indian law. It says the marines have immunity as the tanker was flying an Italian flag and was in international waters when the incident happened.

But India wants the marines to be tried under local laws and has registered a case of murder against the men, who could face the death penalty or life imprisonment if found guilty.

The Enrica Lexie was on its way from Singapore to Egypt, with a crew of 34, including 19 Indians. The Italians say the crew members fired in self-defence - after initially firing warning shots - because they feared their vessel was about to be attacked.

The Kerala state government has authorised a payment of 500,000 rupees ($10,125; £6,450) each to the dead fishermen's families.

Piracy has emerged as a major threat to merchant ships in the Indian Ocean and the Arabian Sea, with Somali pirates hijacking ships and their crews for ransom.

But there have been fewer attacks recently, partly because more armed guards are now deployed on board ships.


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