Royal Bank of Scotland (RBS), Britain's biggest publicly owned lender, will pay about $612 million in fines for manipulating interest rates, the second-largest penalty imposed in a global regulatory probe.
The lender will pay $325 million to the U.S. Commodity Futures Trading Commission, $150 million to the Department of Justice and $137 million to the U.K.'s Financial Services Authority, the CFTC said in a statement Wednesday. RBS's Japanese unit agreed to plead guilty to wire fraud as part of a deal with the Justice Department, the CFTC said.
"The public is deprived of an honest benchmark interest rate when a group of traders sits around a desk for years falsely spinning their bank's Libor submissions, trying to manufacture winning trades," said David Meister, the CFTC's Director of Enforcement. "That's what happened at RBS."
The penalty is the biggest blow to Chief Executive Officer Stephen Hester's attempt to overhaul the lender after it took $71 billion from taxpayers in the largest bank bailout in history in 2008.
The fine, the third to result from the global probe so far, exceeds the $454 million Barclays paid in June, and is second only to the $1.5 billion UBS paid in December.
From at least 2006, more than a dozen RBS traders made "hundreds" of attempts to rig yen and Swiss franc Libor to benefit their positions, the regulator said. At times, the RBS employees succeeded in rigging the benchmark, the CFTC said.
Britain's largest publicly owned bank rose 0.4% as of 1:09 p.m. in London. The shares have gained 17% over the past year. British taxpayers own about 81% of the firm.