Barclays: The Rate the Desk Wanted

Barclays CFTC manipulation settlements required $200 million for LIBOR and Euribor allegations, $115 million for ISDAFIX allegations and $400 million for foreign exchange benchmark allegations. The Commodity Futures Trading Commission alleged that traders sought rates that favored their positions, shared confidential customer orders and timed trades to influence benchmark prices. During the financial crisis, senior management allegedly pressed for lower LIBOR submissions to protect the bank’s reputation. We see the same conflict across these actions: a bank helped set the rates that determined what its own trading book would earn.

The LIBOR and ISDAFIX orders covered Barclays PLC, Barclays Bank PLC and Barclays Capital Inc. The FX order covered Barclays Bank PLC. Across these actions, the Commission’s Division of Enforcement investigated how the bank contributed to benchmarks that also determined the value of its trades.

LIBOR and Euribor Submissions Followed the Trading Book

The Commodity Futures Trading Commission alleged that Barclays attempted to manipulate LIBOR and Euribor and submitted false rates from at least 2005 through at least 2009. These benchmarks were meant to reflect unsecured borrowing costs between banks. They helped price swaps and futures, home mortgages, business borrowing and consumer loans.

An interest rate swap exchanges fixed-rate payments for floating-rate payments. When the floating payment depends on LIBOR, the rate setting matters to the parties on either side of the trade. The CFTC’s LIBOR order cited the benchmark administrator’s estimate that approximately $350 trillion in notional swaps were indexed to LIBOR. A number supplied by a small panel of banks reached far beyond their own trading floors.

At Barclays, the London money market desk managed the bank’s daily funding and supplied its LIBOR rates. The Commission alleged that derivatives traders in New York, London and Tokyo asked the submitters to move those rates to increase trading profits or reduce losses. Requests identified the maturity, the desired direction and sometimes the exact rate. Some covered several days or weeks.

The order reproduced a New York trader’s request to a submitter:

The requested direction followed the trading position. According to the Commission, submitters regularly accommodated requests, and both traders and submitters sometimes put reminders in electronic calendars. These were alleged instructions carried through ordinary workplace communications: email, chats and conversations at the desk.

LIBOR’s calculation discarded the highest and lowest submissions before averaging the rest. The Commission alleged that traders sometimes wanted Barclays’ contribution pushed into one of those discarded groups to influence the final calculation.

Euribor added coordination between banks. The Commission alleged that Barclays Euro swaps traders asked traders elsewhere to influence their own banks’ submissions, while passing outside requests to Barclays submitters as though the requests were their own. The alleged favor could benefit a position held at another institution. The communications explain whose interest the submitted number was serving.

Management Wanted Barclays Back in the Pack

The crisis-era LIBOR suppression allegation concerned the bank’s reputation. From late August 2007 through early 2009, the Commission alleged, senior managers directed lower submissions because Barclays’ higher reported borrowing costs drew unfavorable attention.

Each panel bank’s submission was public. Barclays believed other banks were reporting rates that were too low and that its own higher figures made it look financially weaker. Management allegedly responded by telling submitters to bring Barclays closer to the others. The absurdity: the market’s supposed measure of borrowing costs became something to adjust because management disliked the picture it painted.

The senior U.S. dollar submitter’s email, reproduced in the order, made the conflict explicit:

The Commission treated this management directive as false reporting. The alleged reason for lowering the submissions was the unfavorable attention drawn by the bank’s reported borrowing costs.

ISDAFIX and the Trade Just Before the Print

Barclays’ ISDAFIX action concerned alleged attempts to influence a swap benchmark through both trading and false submissions, from at least January 2007 through June 2012. The CFTC’s ISDAFIX order describes a process built around a snapshot at 11:00 a.m. Eastern Time.

ISDAFIX indicated the market rate for the fixed side of a standard interest rate swap. It also determined cash settlements for swaptions, options to enter into swaps. A favorable movement could increase what Barclays received from a counterparty or reduce what it paid.

How the Screen Became the Benchmark

The broker captured the rates on its 19901 screen at the fixing time and sent reference rates to a panel of banks. Each bank was supposed to submit the midpoint between the rates at which it would buy and sell a standard swap.

The calculation removed the highest and lowest submissions, then averaged the remainder. In practice, most banks accepted the broker’s reference rates. The snapshot usually became the published benchmark.

That gave the last trade before the snapshot unusual importance. The Commission alleged that Barclays traders timed bids, offers and trades to become the last event that moved the screen before the print. Swap spread trading was the main method.

Spending on One Trade to Gain on Another

The alleged economics explain why a trader might accept a loss on the trade that moved the screen. The Commission said Barclays traders expected the benefit to their cash settlements to cover or exceed that trading loss. Traders and brokers called the amounts they could use “ammo.”

The order recorded conversations distinguishing trades intended to hedge risk from trades intended to influence the fixing. It also alleged that traders wanted business routed through the particular broker whose trades could move the benchmark, even when an internal trade was available. The choice of broker, the timing and the position priced off the benchmark belonged to the same decision.

False submissions supplied another way to seek the desired rate. The Commission alleged that traders instructed submitters to report higher or lower levels that benefited the bank’s positions. According to the order, some instructions were shouted across the desks, and some options traders called the broker directly to submit rates for maturities where the bank had exposure.

A survey of banks could look independent while repeating a price traders had just tried to move. That is the weakness the alleged trading and submission methods exploited together.

FX Fixing Used Customer Orders and Private Chats

The FX action alleged that Barclays traders attempted to manipulate currency benchmarks and helped traders at other banks do the same from 2009 through 2012. The CFTC’s FX order described both trading around the WM/R fix and skewed submissions for the Russian ruble benchmark.

For liquid currencies during the period covered by the order, the WM/R 4 p.m. London fix used trading data from a one-minute window. A trader who knew the direction and size of customer orders knew something valuable about the buying and selling due at that moment. The Commission alleged that Barclays traders shared confidential order information and positions in private chat rooms with traders at other banks.

The alleged coordination went beyond telling one another what customers wanted. Traders could move orders that opposed the group’s preferred direction outside the fixing window, combine orders with one trader, or increase trading in the favored direction during the fix. Some rooms were invitation-only. The Commission alleged that participants sometimes used code words to evade compliance monitoring.

Customers entrusted their orders to a bank. In the Commission’s account, that information became material for a private discussion about moving the rate at which orders would be priced. The customer supplied the business and, allegedly, the opportunity.

The Ruble Rate Came From a Survey

The Russian ruble/U.S. dollar CME/EMTA benchmark used bank submissions. Banks supplied bids and offers for a spot transaction for next-day value in Moscow. The resulting benchmark was used to settle ruble non-deliverable forwards and calculate the final settlement price of ruble futures.

The Commission alleged that, in limited instances between August 2009 and August 2011, a Barclays trader supplied bids and offers skewed to benefit the trader’s positions or those of traders at other banks. Here the evidence concerned the survey response and the interest behind it, alongside the chats. In the WM/R allegations, it concerned the orders and trading around the window.

Barclays CFTC Penalties Reached Into the Trading Floor

The Barclays LIBOR, ISDAFIX and FX CFTC penalties came from separate settlements: the LIBOR/Euribor order dated June 27, 2012, and the ISDAFIX and FX orders dated May 20, 2015. Each required changes to the bank’s controls as well as its civil payment. The CFTC’s LIBOR announcement also identified a separate £59.5 million penalty imposed by the United Kingdom’s Financial Services Authority against Barclays Bank PLC.

The LIBOR order required submissions grounded in borrowing information, records explaining how the rates were determined and restrictions on trader communications with submitters. One requirement was remarkably physical: separate the submitters from the relevant derivatives traders so the groups could not hear each other.

The ISDAFIX and FX orders required review of written and recorded communications as part of closer supervision. The FX order also recorded Barclays’ representation that it had prohibited spot FX traders from participating in multi-bank chat rooms.

The Commission alleged that some FX conduct occurred while Barclays already knew regulators were investigating LIBOR manipulation. Different benchmark. Familiar conflict.

The Energy Law Journal’s 2017 Report of the Compliance & Enforcement Committee describes federal energy regulators’ concern about relying too heavily on standardized annual training. It separately describes their recommendation to monitor trading consistently. The Barclays orders addressed that same practical problem: what happens at the desk between training sessions.

What Barclays Insiders Would Have Seen

The Barclays evidence connected rate requests and trading instructions to submissions, trades and the positions or customer orders behind them. An insider may understand why a rate was requested, why a broker was selected or why an order had to arrive at a particular moment. We examine those connections with the person who understands the desk.

The 2024 working paper An Analysis of Market Manipulation Definitions Around the World, from a World Federation of Exchanges research project, distinguishes manipulation through trading, information, submissions and orders. That distinction matters here: a submitted number, a real trade and a private message can reveal different parts of an alleged scheme.

A separate CFTC complaint against a swaps trader alleged that minimum-size trades moved the same 19901 screen during live pricing of a client’s transaction. The complaint alleged that the trader and a desk head used personal-phone messages that the bank could not monitor. It quoted this instruction:

The September 2026 consent order dismissed the trading allegations and resolved the allegation that the trader made false statements to the Commission. The earlier complaint had alleged that minimum-size trades moved the screen during live pricing of a client’s transaction.

For the Barclays allegations, those connections included calendars and rate requests, audio recordings with brokers, customer order flow and cross-bank chats. CFTC whistleblower eligibility can extend beyond employees, including customers and market observers.

Whistleblower Rewards for Benchmark Information

The CFTC whistleblower program can pay whistleblowers a combined 10% to 30% of the sanctions collected when their information leads to successful enforcement. We work through the information, your role and the relevant program with you. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Why the Desk Wanted That Rate

If you know who requested a submission, what the chat meant or why a trade had to hit the screen at the fixing, speak with our whistleblower experts. We build your strongest CFTC whistleblower case around that knowledge, bring in CFTC whistleblower lawyers who understand the trading and stay beside you throughout the case.