On Friday, it was disclosed that a Barclays employee notified the Federal Reserve Bank of New York in April 2008 that the firm was underestimating its borrowing costs. Despite the warning signs, the illegal actions continued for another year.
But in April 2008, a senior enforcement official at the Commodity Futures Trading Commission, Vincent McGonagle, opened an investigation. He directed the case along with another longtime official, Gretchen Lowe.
At first the case stalled as the agency waited months to receive millions of pages of documents when Barclays pushed back against the American regulators, according to the officials close to the case. By the fall of 2009, the trading commission received a trove of information, providing a broad view into the wrongdoing.
A series of incriminating e-mail and instant messages, regulators say, laid bare the multiyear scheme. In one document, a Barclays employee said the bank was “being dishonest by definition.”
The case gained further traction in early 2010, when the agency’s enforcement team engaged the Justice Department. The department’s criminal division, led by Mr. Breuer, agreed that regulators had a strong case. The investigation continued until January 2012, when the trading commission notified Barclays lawyers that they were entering the final stages before deciding about an enforcement action.
As part of the deal, regulators pushed the bank to adopt new controls to prevent a repeat of the problems. Among other measures, the bank must now “implement firewalls” to prevent traders from improperly talking with employees who report rates.
The bank says that it provided extensive cooperation during the three inquiries, and has spent around $155 million on its own three-year investigation. Because it agreed to settle with British authorities, Barclays received a 30 percent fine reduction.
In the United States, Barclays offered to pay a fine of $200 million to the C.F.T.C., slightly below the initially proposed range, according to government officials close to the case. Mr. Meister’s team soon accepted the offer, securing the biggest fine in the commission’s history.
On June 27, British and American authorities announced the deal with Barclays, which agreed to pay more than $450 million total. “For this illegal conduct, Barclays is paying a significant price,”
Here we cannot say there was a move with alarcityto prevent fraud. Theyknew in 2008-and now it's 2012 and people have yet to be charged. In the meantime the scheme went on and foward.
We hear to that Geithner-now Treasury Sectary warned about this as early as 2007 as a member of the Fed Reserve. Yet noaction was taken. Againwhy? It would have been to his credit if heblew the whisle then.
Nothing happened! Why? You hear about fraud and take noaction- that co-conspitor status. That's aiding and abetting the crime. That's indicaable, too.
The Treasury Sectary has much to aswer for on this one. Give the broad nature of thecrime and the world wide impact-Geithner should have ranto the Justice Department and called a press conferene.
Geithner is emerging as the Joe Patrno of the Treasury. Just like Joe he doesn't act-inoforing police and relevant authories..
Tosay one knew in 2007 and it is 2012 is no great reccondation for anthing. And where were the other regulators like the Commodites Futre Commision? They knew or shuld have known. Yet where were they?
Peple say they were over reguated. If soi we don't see it.
We see people asleep at the swich unwilling to blow the whistle. We see a banking buddy system out of control.We see a culture run amuck. We see those inauthority seeing no evil and doing even less toend it.
Theyknew and did nothing. And everyone needs to be replaced.-fromtop tobottom.