The Serious Fraud Office, or SFO, is considering an investigation into various current and former employees of Lloyds bank, which would trigger a criminal investigation into these people and their actions while working for the bank. The bank has just been handed a $370m fine for its part in the global interest rate rigging scandal, and this next probe is said to have been started because the SFO was handed data by the Financial Conduct Authority that indicates that employees of the bank may have taken actions to manipulate benchmark rates. The bank itself has said that it always assists the authorities in any investigations, but refused to be drawn to make a comment on this particular case.
It was an internal investigation by the part State owned bank itself that led to the original investigation into the rigging of repo rates. They passed information on potential wrongdoing onto the FCA who, as a matter of course and routine, passed the information straight to the Serious Fraud Office.
The repo rate was set up in 2008 to help improve UK bank performance, and it is used to determine the price for trillions of dollars of financial products around the world. Lloyds was one of several companies and financial institutions that were investigated in the US, and they received a $370m fine for their parts. Seven companies have so far settled while 17 men have been found guilty of fraud offences. However, none of those 17 men worked for Lloyds.
The Serious Fraud Office has said that it is considering investigation into a number of potential activities and people, and that the potential crimes were reprehensible and may well lead to criminal conviction of some or all of the people involved.
Bank of England Governor Mark Carney iterated this sentiment by telling Lloyds that criminal action could be taken against any individuals that were found to be responsible, and he said the actions were clearly unlawful. The SFO is currently examining the material it has been handed, and will make a decision whether to proceed with criminal action in the coming weeks.