Former Societe Generale employees accused of Libor manipulation by US

United States authorities on Thursday charged two managers at the French bank Société Générale with taking part in a scheme to manipulate a global benchmark interest rate known as Libor.

As Reuters reported, Danielle Sindzingre, 54, the bank’s former global head of treasury, and her subordinate Muriel Bescond, 49, its former head of treasury in Paris, were accused in an indictment filed in a New York federal court of submitting false information about the rates at which the bank was able to borrow money.

The two defendants are not in the United States, according to John Marzulli, a spokesman for federal prosecutors in Brooklyn. He declined to comment on whether or when they might be extradited.

Banks use Libor, or the London Interbank Offered Rate, to set rates on hundreds of trillions of dollars of mortgages, credit cards and other loans. The rates in several different currencies are calculated based on banks’ reports of how much interest they pay to borrow money.

Prosecutors said that from about May 2010 to October 2011, the two employers and several other people who are not charged or named in the indictment caused Société Générale to report false lower rates that were used to set the United States dollar Libor.

According to the indictment, the scheme aimed to shore up the bank’s reputation after outside analysts drew attention to higher-than-average interest rates Société Générale had been reporting.

The false reports at times led to lower United States dollar Libor rates, affecting millions of transactions tied to the benchmark rate and causing more than $170 million in harm to global financial markets, prosecutors said.

SocGen said on Friday it was co-operating with authorities over the matter.

“Societe Generale has received formal requests for information from several authorities, including the U.S. Department of Justice, in connection with investigations regarding submissions to the British Bankers Association for setting certain benchmark rates, including the London Interbank Offered Rates (Libor),” it said in a statement.

Banks have paid roughly $9 billion to resolve Libor-rigging probes worldwide, and several people have been convicted of criminal charges.