$200m reward given to Libor whistleblower

A FORMER Deutsche Bank employee who blew the whistle about Libor rigging has been handed a record-breaking reward of almost $200m (£145m) by a US regulator.

The Commodity Futures Trading Commission (CFTC) said the payment had been made for “specific, credible and timely original information” that “significantly contributed” to investigations in the US and UK.

It did not name the whistleblower but it has been reported that the record sum went to a former employee of the German bank. It is understood to be linked to the $2.5bn fine Deutsche paid to US authorities in 2015.

The US derivatives regulator added that the information provided by the whistleblower led to a “successful enforcement action, as well as to the success of two related actions, by a US federal regulator and a foreign regulator”.

Libor, or the London Interbank Offered Rate, has been used since the 1980s as a benchmark for lending between banks. However, the rate was tainted in 2012, when traders were found to be fixing it. The scandal resulted in around $9bn of global fines for some of the world’s biggest banks.

The City watchdog is in the process of phasing out Libor.

US law firm Kirby Mcinerney confirmed one of its clients had secured the bounty after providing information and documents in 2012 that “catalysed” investigations. David Kovel, a partner at the firm, said: “The whistleblower award amount may seem shocking but it’s because the ability to manipulate and make huge profits is shocking. It follows from the misconduct.”

Barclays and Deutsche were among the banks that reached settlements over the scandal. Deutsche Bank declined to comment.