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Barclays Libor Scandal: Naming Names

Posted by Larry Doyle on July 24, 2012 8:38 AM |

When battling wildfires, firefighters will very often scorch the earth and sacrifice acreage and property as a defensive mechanism against the wildfire taking over and destroying even more valued territory.

As I review recent developments in the scandalous Libor “wildfire,” a mental image of that defensive strategy runs through my head. Why is that?

With news of pending arrests in this case, we awake this morning to see a number of individual names released by The Wall Street Journal as seemingly ring leaders and participants in this scandal. 

As I read the WSJ’s report, Libor Probe Expands to Bank Traders, I had a wide array of strong feelings come over me, including:

1. These individuals have neither yet been arrested nor charged with a crime. Why does the WSJ feel it is at liberty to publish their names, cast a heavy dose of implied guilt upon them, and effectively end their financial careers? Is the WSJ doing the bidding of the financial regulators and/or the Wall Street heavyweights occupying corner offices?

2. Is there any doubt that by publicizing their names, financial regulators — or whomever is behind the release — are trying to intimidate these individuals and get them to speak?

3. Each of the individuals named had a manager charged with supervising their trading activities. I think again this morning of what I addressed in writing, Barclays Libor Scandal: Who’s Really to Blame?

Do you think the CEOs of other banks would also like to ring fence this issue to a small group of expendable individuals on selected trading desks? No doubt.

Are we to believe that a manipulative scheme of this scale is the work of a relatively small number of mid-level execs? Stop it. Talk about taking naivete to a stratospheric level.

The heads of each desk involved in this mess have/had enormous managerial oversight responsibilities. Included in those responsibilities is the review of e-mails which are flagged to detect questionable activities. Should the blame stop there? Not even close. Those managers would be required to report questionable activities to their superiors and the appropriate people within Compliance. At this point, we are reaching into very senior levels of each and every Wall Street bank. Can we stop digging? Not yet.

It defies logic to think that at some point the heads of Compliance and Trading would not have mentioned the manipulation of a rate such as Libor to the highest levels of the organization.

With these three thoughts and impressions running through my mind, why is it that the WSJ did not also release the names of each desk manager/supervisor, heads of division, heads of compliance, and those further up the line?

I am not here to defend the actions of the individuals referenced in the WSJ article released this morning. Anything but.

I am here to bang the drum loudly in the hope that the pursuit of truth and transparency in this scandal runs the full course. To do otherwise would be little more than another rendition of “justice neglected is justice denied.”

America is supposed to be better than that.

Related Sense on Cents Commentary
Barclays Libor Scandal: Wake Up, America!!
Barclays Libor Scandal: The Complicit Regulators
Barclays Libor Scandal: The Precedent
Barclays Libor Scandal: Holding Regulators to Account
Barclays Libor Scandal: “Diamond Lied”
Barclays Libor Scandal: Who’s Really to Blame? 
Barclays Libor Scandal: When Did Manipulation Start?
Barclays Libor Scandal: How Big Will This Get?
Barclays Libor Scandal: Reports Regulators Knew; Time for Independent Investigation and Eliot Spitzer
Barclays Libor “Price Fixing”: Collusion Is Illegal. . .
Barclays Libor Scandal: Prison Will Remedy

Larry Doyle 

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I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

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