Brevan Howard Sought LIBOR Rate Change Says Ex-RBS Trader

Brevan Howard is the fund co-founded by Alan Howard, ex-head of proprietary trading at Credit Suisse First Boston, and Jean-Philippe Blochet in 2002. The fund ranked fifth in Institutional Investor’s Hedge Fund 100 in 2011 by employing a strategy focused on what it calls “asymmetrical outcomes” – philosophy it uses on all of its investments, from interest rates to currency, equities to commodity price movements. The fund focuses on making risk-averse investments based on macro events – but some risks, you just can’t prepare for. In this case, the issue, allegedly, is that the hedge fund asked the Royal Bank of Scotland PLC (RBS) to change the Libor rate, or at least that is what a former trader for RBS said in court documents filed as part of a wrongful dismissal suit reports Reuters.”Tan Chi Min, who was head of delta trading for RBS and based in Singapore, said in papers in a wrongful dismissal case that the fund telephoned the bank on August 20, 2007 and asked if they could change the bank’s submission.” RBS said in March that several of its staff were being investigated as to whether they tried to influence LIBOR lending rates. The fund is not named in the suit nor is it accused of any wrongdoing. 

Alan Howard

Tan filed suit against RBS after being fired in December over allegations that he tried to improperly influence RBS’s LIBOR rates from 2007 to 2011. In the suit, Tan alleges that “it was in fact common practice among senior RBS employees to make requests to the bank’s rate setters as to the appropriate Libor rate.” RBS filed a formal response with the court in January, in which it explained that TAn had been fired for gross misconduct.
According to Reuters, “In the court papers, the bank said Tan had sought to improperly influence RBS’s rate setters by communicating requests to have their Libor submissions set at particular levels in order to maximise his or the bank’s trading book profits.” Tan entered a response with the court in February in which he claimed “RBS was attempting to make a scapegoat of individual employees to deflect attention from the bank in relation to regulatory inquiries taking place into alleged manipulation of the LIBOR rate.”

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