In the Matter of: 

UNITED STATES OF AMERICA 

Before the 

COMMODITY FUTURES TRADING COMMISSION 

) 

) 

) 

The Royal Bank of Scotland plc and 

RBS Securities Japan Limited, 

) CFTC Docket No. 13 -14 

) 

) 

Respondents. ) 

__________________________ ) 

ORDER INSTITUTING PROCEEDINGS PURSUANT TO 

SECTIONS 6(c) AND 6(d) OF THE COMMODITY EXCHANGE ACT, MAKING 

FINDINGS AND IMPOSING REMEDIAL SANCTIONS 

I. 

The Commodity Futures Trading Commission ("Commission" or "CFTC") has reason to 

believe that The Royal Bank of Scotland plc and RBS Securities Japan Limited (collectively, 

"RBS" or "Respondents") have violated Sections 6(c), 6(d) and 9(a)(2) of the Commodity 

Exchange Act (the "Act" or the "CEA"), 7 U.S.C. §§ 9, 13b and 13(a)(2) (2006). Therefore, the 

Commission deems it appropriate and in the public interest that public administrative 

proceedings be, and hereby are, instituted to determine whether Respondents engaged in the 

violations set forth herein, and to determine whether any order shall be issued imposing remedial 

sanctions. 

II. 

In anticipation of the institution of an administrative proceeding, Respondents have 

submitted an Offer of Settlement ("Offer"), which the Commission has determined to accept. 

Without admitting or denying the findings or conclusions herein, except to the extent 

Respondents admit those findings in any related action against RBS by, or any agreement with, 

the Department of Justice or any other governmental agency or office, Respondents herein 

consent to the entry and acknowledge service of this Order Instituting Proceedings Pursuant to 

Sections 6( c) and 6( d) of the Commodity Exchange Act, Making Findings and Imposing 

Remedial Sanctions ("Order"). 1 

Respondents consent to the entry of this Order and to the use of these findings in this proceeding and 

in any other proceeding brought by the Commission or to which the Commission is a party; provided, 

however, that Respondents do not consent to the use of the Offer, or the findings or conclusions in this 

Order, as the sole basis for any other proceeding brought by the Commission, other than in a proceeding 

in bankruptcy or to enforce the terms of this Order. Nor do Respondents consent to the use of the Offer or 

this Order, or the findings in this Order consented to in the Offer, by any other party in any other 

proceeding. 
III. 

The Commission finds the following: 

A. Summary 

The London Interbank Offered Rate ("LIBOR") is a leading global benchmark interest 

rate, critical to international financial markets. LIBOR is determined each day based on rates 

submitted by a select panel of banks. The rates contributed by the panel banks are supposed to 

reflect each banlc' s honest assessment of the costs of borrowing unsecured funds in the London 

interbanlc market, not the profit motives of traders. Over a period of more than four years, RBS 

violated this fundamental precept and undermined the integrity of LIB OR for Yen and Swiss 

Franc. 

Commencing in at least mid-2006 and continuing through 2010, RBS made hundreds of 

attempts to manipulate Yen and Swiss Franc LIBOR and, on numerous occasions, made false 

LIBOR submissions to benefit its derivatives and money market trading positions. At times, 

RBS also aided and abetted other panel banlcs' attempts to manipulate those same rates. This 

misconduct involved more than a dozen RBS derivatives and money market traders, one 

manager, and multiple offices around the world, including London, Singapore and Tokyo. 

Sometimes, RBS was successful in manipulating Yen and Swiss Franc LIBOR. 

The ways in which RBS conducted this scheme all followed a similar theme. The 

profitability of RBS' s Yen and Swiss Franc derivatives positions, such as interest rate swaps, 

depended on Yen and Swiss Franc LIBOR, as did certain ofRBS's money market positions. 

RBS traders would ask their colleagues to make false submissions that were beneficial to RBS's 

trading positions. The traders' requests were either for falsely high submissions or falsely low 

ones, whatever was needed to turn a profit. The submitters often accommodated those requests 

by making false submissions. The statement of an RBS trader at the time makes their motivation 

clear: "[I]ts [sic] just amazing how libor fixing can make you that much money." 

RBS created an environment for a number of years that eased the path to manipulation 

inasmuch as RBS sat derivatives traders and submitters together on the same desk, heightening 

the conflict of interest between the profit motives of the traders and the responsibility of 

submitters to make honest submissions. When derivatives traders and submitters eventually 

were separated (for business, not compliance reasons), the misconduct continued through 

Bloomberg chats and an internal instant messaging system ("instant messages") rather than by 

one trader merely turning in his chair to speak to his colleague on the desk Some of these 

submitters were even traders themselves, and skewed their LIBOR submissions to drive the 

profitability of their own money market and derivatives trading positions. 

RBS derivatives traders also unlawfully worked in conce1i with a trader from a UBS AG 

subsidiary ("UBS"), also a LIBOR panel bank, in attempts to manipulate Yen LIBOR, and with a 

trader at another panel bank in attempts to manipulate Swiss Franc LIBOR. RBS also aided and 

abetted UBS's attempts to manipulate Yen LIBOR by executing wash trades (trades that result in 

financial nullities) in order to generate extra brokerage commissions to compensate two 

interdealer brokers for assisting UBS in its unlawful manipulative conduct. On at least one 

2 
occasion, RBS also requested the assistance of an interdealer broker to influence the submissions 

of multiple panel banks in an attempt to manipulate Yen LIB OR. 

RBS engaged in its attempts to manipulate Yen and Swiss Franc LIBOR despite the 

questions that arose in the media in 2007 and 2008 about the integrity of banks' LIBOR 

submissions, LIBOR reviews and guidance by the British Bankers' Association in 2008 and 

2009, and the Commission's request in April2010 that RBS conduct an internal investigation 

relating to its U.S. Dollar LIBOR practices. In fact, certain RBS employees involved in the 

misconduct were aware of the CFTC LIBOR investigation, and nonetheless continued their 

manipulative conduct while at the same time trying to conceal those efforts by not using 

Bloomberg chats or instant messages. 

RBS's traders were able to carry out their many attempts to manipulate Yen and Swiss 

Franc LIBOR for years because RBS lacked internal controls, procedures and policies 

concerning its LIBOR submission processes, and failed to adequately supervise its trading desks 

and traders. RBS did not institute any meaningful controls, procedures or policies concerning 

LIBOR submissions until in or about June 2011. During this time, RBS was experiencing 

significant growth on its Yen and Swiss Franc trading desks, generating revenues for RBS that 

were multiplying over the years. 

*** 

In accepting RBS's Offer, the Commission recognizes Respondents' cooperation during 

the Division of Enforcement's investigation of this matter, which helped the Division efficiently 

and effectively undertake its investigation. 

B. Respondents 

The Royal Bank of Scotland pic is a British banking and financial services company 

headqumiered in the United Kingdom ("U.K."). It has operations in approximately forty (40) 

countries and territories, including the United States and Singapore. On December 31, 2012, The 

Royal Bank of Scotland plc was provisionally registered as a swap dealer with the Commission. 

RBS Securities Japan Limited is a wholly owned subsidiary of The Royal Banl<. of 

Scotland plc engaged in market operations and is a securities broker-dealer. It has an office in 

Tokyo. 

C. Facts 

Commencing in at least mid-2006, RBS, through the acts of its derivatives and money 

market traders and other employees located in London, Tokyo and Singapore, often attempted to 

manipulate the fixings of Yen and Swiss Franc LIB OR. 2 On a number of those occasions, RBS 

made false LIB OR submissions in fmiherance of its manipulative attempts, which at times were 

2 Most of the traders involved in this conduct are no longer employed at RBS. 

3 
successful. 3 The RBS traders engaged in this manipulative conduct to profit on RBS's 

significant derivatives and money market trading positions that were indexed to and therefore 

valued based on Yen and Swiss Franc LIB OR. At times, RBS derivatives traders also colluded 

with traders at other panel banks and coordinated with interdealer brokers in attempts to 

manipulate Yen and Swiss Franc LIBOR.4 

1. LIB OR and the BBA Fixing of LIB OR 

LIBOR is the most widely used benchmark interest rate in the world. Approximately 

$350 trillion of notional swaps and $10 trillion ofloans are indexed to LIB OR. It is the basis for 

settlement of interest rate futures and options contracts on many of the world's major futures and 

options exchanges and is used as a barometer to measure strain in money markets and is often a 

gauge of the market's expectation of future central bank interest rates. To be sure, LIBOR is 

fundamentally critical to financial markets and has an enormously widespread impact on global 

markets and consumers. 

Daily LIBORs are issued on behalf of the British Bankers' Association ("BBA")5 for ten 

currencies, including Yen and Swiss Franc, with fifteen tenors ranging from overnight through 

twelve months. According to the BBA, LIBOR "is based on offered inter-bank depo~it rates 

contributed in accordance with the Instructions to BBA LIBOR Contributor banks." The BBA 

requires that: 

[a]n individual BBA LIBOR Contributor Panel Bank will contribute the rate at 

which it could borrow funds, were it to do so by asking for and then accepting 

inter-bank offers in reasonable market size just prior to [11 :00 a.m. London 

time].6 

Every business day shortly before 11 :00 a.m. London time, the banks on the LIBOR 

panels submit their rates to Thomson Reuters. A trimmed averaging process is used to exclude 

the top and bottom quartile of rates and the remaining rates are averaged for each tenor. That 

average rate becomes the official BBA daily LIB OR (the "LIBOR fixing"). The LIBOR 

submission of each submitting panel banlc is submitted between two and five decimal places, and 

the LIBOR fix is rounded, if necessary, to five decimal places. For purposes ofLIBOR, one 

basis point (or "bp") is one-hundredth of one percent (0.01 %). The BBA then makes public the 

daily LIBOR fixing for each currency and tenor, as well as the daily submissions of each panel 

RBS traders engaged in similar misconduct in connection with the Singapore Interbank Offered Rate 

("SIDOR") and the Singapore Swap Offered Rate ("SOR"). Some SIDOR and SOR-related misconduct 

took place from May 2010 through August 2011, even as RBS was conducting its internal investigation. 

4 RBS, through a Euro derivatives trader, also colluded with traders at other banks on at least a handful 

of occasions relating to another benchmark interest rate, Euribor, by asking for beneficial Euribor 

submissions to be made by the other banks. This conduct occurred from September 2007 through at least 

mid-2008. 

The BBA is a trade association for the United Kingdom banking and financial services sector and is 

comprised of member banks. 

6 This definition of LIDOR has been used by the BBA from 1998 to the present. 

4 
bank, through Thomson Reuters and the other data vendors licensed by the BBA. This 

information is made available and relied upon by market participants and others throughout the 

world, including in the United States. 

By its definition, LIBOR requires that the submitting panel banks exercise their judgment 

to determine the rates at which they may obtain unsecured funds in the London interbank market. 

These definitions require that submissions relate to funding and do not permit consideration of 

factors unrelated to the costs of borrowing unsecured funds, such as the benefit to a bank's 

derivatives or money market trading positions.7 

2. RBS's LIBOR Submission Process 

RBS is a member of the BBA and is one of the panel banks that submits rates for the 

determination of LIB OR in Yen, Swiss Franc, and other currencies. 8 During the periods relevant 

herein, an RBS representative participated on two key BBA committees: the Foreign Currency 

and Money Market ("FX & MM") Committee responsible for the operation and management of 

LIBOR; and the Steering Committee responsible for annual reviews of the LIBOR definition and 

determining the composition of panel banks. RBS also participated in critical BBA reviews of 

the LIBOR process in 2008 and 2009 after questions arose about the integrity of the process. 

RES's Money Market Traders Were Responsible for Determining LIBOR Submissions 

Responsibility for making RBS's LIBOR submissions was assigned to certain Londonbased money market traders until March 2012. RBS money market traders were responsible for 

ensuring that the banlc met its funding needs each day in all currencies, including Yen and Swiss 

Franc. To do so, RBS money market traders engaged in both intra-bank and inter-banlc 

borrowing and lending transactions. RBS money market traders also traded derivatives products 

that were indexed to, and therefore valued based on, LIB OR, including Yen and Swiss Franc 

LIB OR. One money market trader was primarily responsible for making both the Yen and Swiss 

Franc LIBOR submissions ("Primary Submitter"). 

The Primary Submitter considered ce1iain market information in determining RBS' s Yen 

and Swiss Franc LIBOR submissions, such as RBS's funding needs, money market transactions, 

futures and other derivatives prices, "market color" communications with derivatives traders, 

information from interdealer brokers, arbitrage transactions, and synthetic cash deposits in 

various currencies. But the Primary Submitter also improperly considered requests to benefit 

derivative traders' positions or his own positions. At times, the Primary Submitter skewed the 

LIBOR submissions to benefit those positions. 

In June 2008, the BBA clarified that the basis for a panel bank's submission must be the rates at 

which members of the bank's staff primarily responsible for management of the bank's cash, rather than 

the bank's derivative trading book, consider that the bank can borrow unsecured interbank funds in the 

London market. The BBA also clarified that panel banks could not contribute a rate based on the pricing 

of any derivative financial instrument. 

8 During the relevant period, RBS also submitted rates for the determination ofLIDOR in other 

currencies such as U.S. Dollar, Australian Dollar, Canadian Dollar, Danish Krone, Euro, New Zealand 

Dollar, Sterling, and Swedish Krona. 

5 
After considering these factors, the Primary Submitter or his backups determined a rate 

for each tenor and input the rates into a spreadsheet that was then submitted to Thomson Reuters 

shortly before 11:00 a.m. London time. 

RES Organized Trading Desks to Encourage Money Market and Derivatives Traders to 

Communicate 

RBS Yen and Swiss Franc derivatives traders traded various derivatives instruments that 

were priced based on Yen or Swiss Franc LIB OR. These products included interest rate swaps, 

9 

Forward Rate Agreements, foreign exchange ("FX") forwards, cross-currency swaps, overnight 

index swaps and tenor basis swaps. The derivatives instruments traded by the interest rate desks 

globally throughout RBS were used to hedge the desk's interest rate risk and also to generate a 

profit for the desk. Many of their derivatives contracts settled or reset on International Monetary 

Market ("IMM") dates, which are quarterly dates in March, June, September and December. 

In October 2006, RBS senior management decided to facilitate more communication 

between derivatives traders and money market traders, some of whom were also LIBOR 

submitters, by locating them on the same RBS currency trading desks. This co-location plan was 

known as the Short-Term Markets Desk ("STM"). One of the express purposes of STM was to 

encourage derivatives and money market traders to communicate about the relevant market 

conditions that could impact trading and funding decisions. The seating arrangement, however, 

magnified the preexisting conflict of interest between the profit motive of traders and the 

responsibility ofLIBOR submitters to assess honestly RBS's costs of borrowing unsecured funds 

in the London interbank market. RBS did not provide any guidance or controls over what 

constituted appropriate communications between the derivative traders and money market traders 

who were the LIB OR submitters. The result was an environment where the RBS Yen and Swiss 

Franc traders had increased opportunities to attempt to manipulate Yen and Swiss Franc LIB OR 

to RBS's benefit. 

RBS's Yen and Swiss Franc derivatives traders quickly took advantage of this new 

arrangement. Sitting with the Primary Submitter, the traders not only shared their views of 

market conditions, or "market color," but they also told him what their trading positions were 

and encouraged him to make submissions that would make their positions more profitable. At 

times, if the Primary Submitter was not at the desk, the traders made written requests via 

Bloomberg chats or instant messages. 

If the Primary Submitter was absent, junior derivatives and money market traders 

determined RBS's Swiss Franc LIBOR submissions, and a London-based derivatives trader 

("Yen Trader 1 ") made the Yen LIB OR submissions. The substitute submitters took advantage 

ofthose opportunities to ensure that the Yen and Swiss Franc LIBOR submissions were 

beneficial either to those of other RBS traders, or at times positions held in RBS 's Yen or Swiss 

Franc money market trading book. 

9 An interest rate swap generally exchanges a fixed payment for a floating payment, which is usually 

tied to LIBOR. 

6 
STM was in place formally until mid-2008 and continued informally for Yen and Swiss 

Franc traders into 2009. In the spring of2009, the trading floor was reorganized, and the 

derivatives traders and submitters were separated onto different desks. The seating change did 

nothing to slow the scheme. When they were no longer in close proximity to the submitters, the 

traders increased their use of Bloomberg chats and instant messages to continue making requests 

for beneficial submissions, which were frequently accommodated. 

3. RBS Made False Reports, Manipulated and Attempted to Manipulate Yen 

and Swiss Franc LIBOR for Certain Tenors Over Several Years to Benefit 

RBS Trading Positions 

From at least mid-2006 through at least late 2010, RBS frequently attempted to 

manipulate Yen LIB OR, and on numerous occasions made false Yen LIB OR submissions in 

furtherance of those attempts. From late 2006 through late 2009, RBS also attempted to 

manipulate Swiss Franc LIBOR, and made false Swiss Franc LIBOR submissions on a number 

of occasions, in fmiherance of its manipulative attempts. At times, RBS was successful in 

manipulating Yen and Swiss Franc LIB OR. 

a. RBS's False Reporting and Manipulation of Yen LIBOR to Benefit 

Trading Positions 

Prior to 2006, the Yen swaps market was relatively stable and substantially smaller than 

the U.S. Dollar and Sterling markets. RBS was not a significant participant in the Yen swaps 

market. By mid-2006, the Yen swaps market became much more active and trading volume 

increased. Desiring a bigger presence, RBS recruited two experienced Yen derivatives traders 

for its subsidiary in Tokyo, RBS Securities Japan Limited, one to act as a manager responsible 

for RBS' s Yen trading globally ("Yen Manager") and the other as a senior Yen derivatives trader 

("Senior Yen Trader"). 10 Both were well known in the industry as successful traders. 

RBS gave the Senior Yen Trader and Yen Manager significant discretion to assume 

sizable risk and establish RBS as a major player in the Yen interest rate derivatives market. 

They succeeded, generating revenues from Yen interest rate derivatives trading alone of almost 

$200 million from 2006 through 2010. 11 RBS 's Yen derivatives trading books were traded 24 

hours a day, from RBS trading desks in the United States, U.K., and Asia under the direction of 

Yen Manager and the Senior Yen Trader. The Senior Yen Trader generally managed the trading 

of short-term tenors of the Yen trading book, assisted by a Yen derivatives trader in Connecticut 

and Yen Trader 1 located in London. Yen Trader 1 also was the backup Yen LIB OR submitter. 

Yen Manager generally managed the trading of longer-term tenors, assisted by another Yen 

10 In 2009, the Senior Yen Trader relocated to the Singapore office of The Royal Bank of Scotland pic, 

where he continued attempting to manipulate Yen LIB OR as found herein. 

11 From 2006 to 2007, RBS's Yen traders increased RBS's revenues from trading in the Yen interest 

rate derivatives market, from a small loss to a gain of over $20 million. In 2008, RBS 's revenues from 

Yen interest rate derivatives trading more than quadrupled, exceeding $90 million. In 2009 and 2010 

combined, RBS reaped more than $90 million in additional revenue from Yen interest rate derivatives 

trading. The Yen desk also traded other Yen based products that generated additional significant revenue 

forRBS. 

7 
derivatives trader in London ("Yen Trader 2"). At the end of the trading day in Asia, RBS 

passed its Yen trading book first to London, then to Connecticut, and back to Asia when trading 

resumed in Asia. 

From mid-2006 through late 2010, RBS's Yen LIBOR submissions for the one, three, 

and six-month tenors were included in the official Yen LIBOR trimmed average rate the vast 

majority of the time, as set forth in the following table. 

PERCENTAGE OF RBS YEN LIBOR SUBMISSIONS 

INCLUDED IN FINAL LIB OR FIXING 

YEARu 1 MONTH 3 MONTH 6MONTH 

TENOR TENOR TENOR 

2006 91.3% 18.8% 62.4% 

2007 78.7% 69.2% 82.2% 

2008 73.6% 75.6% 79.1% 

2009 93.3% 87.0% 83.8% 

2010 95.3% 88.9% 92.5% 

During the same time frame, multiple RBS Yen traders and at least one manager 

attempted to manipulate LIBOR by making hundreds of requests of the Primary Submitter and 

London-based traders, including Yen Traders 1 and 2. At times, they were successful in 

manipulating Yen LIBOR. The Senior Yen Trader made most ofthe requests, but Yen Manager 

and other RBS Yen traders also made such requests. London-based Yen derivatives traders also 

made their own requests of the Primary Submitter, both in person as they sat together during the 

STM period, and through Bloomberg chats and other means. The traders' requests for 

preferential Yen LIB OR submissions were common and made openly on the trading floors in 

Asia and London. At times, at least one RBS manager was present when requests were made. 

The requests were often accommodated by the Primary Submitter and by the backup submitters, 

including most often Yen Trader 1 when he was the backup. 

Yen derivatives traders' requests for beneficial submissions were usually for the most 

frequently traded tenors: one-month, three-month, and six-month. At times, the requests covered 

other tenors as well. Always seeking to maximize profit, the traders either asked for specific 

rates to be submitted or asked for a directional move, either higher or lower, in RBS's 

submissions. The requests were either for a particular day or for several days, and on some 

occasions, even weeks of submissions. 

i. Internal Yen Requests by the Senior Yen Trader and Others 

In addition to the oral requests for preferential Yen LIB OR submissions made by RBS 

Yen traders, the Yen traders made hundreds of improper requests by Bloomberg chat and other 

means. 

13 The following are some examples of such written requests: 

12 The 2006 percentages are calculated from June 1, 2006 through December 31, 2006. 

8 
August 29, 2006: 14 

Yen Trader 3: 

Yen Trader 4: 

Yen Trader 3: 

February 14, 2007: 

Senior Yen Trader: 

Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 1: 

May 3, 2007: 

Senior Yen Trader: 

Yen Trader 5: 

Senior Yen Trader: 

Yen Trader 5: 

September 3, 2009: 

Senior Yen Trader: 

Yen Trader 6: 

Senior Yen Trader: 

May 20, 2010: 

Senior Yen Trader: 

Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 6: 

big 6m fix today, [ ... ] 

we got loads yeh [ ... ] need it kept low but I 

think we're on the low side of the fix 

anyway 

will try to get it as low as possible 

3m libor seem to be set low today .. we have 

big fixing tomorrow[,] luckily 6m libor 

comes in higher than yest 

yes[,] slightly[,] 250 fixing tomorrow? 

yep 

[Primary Submitter] will try for us 

can you drop a note to [Primary Submitter] 

to set low 1m and low 3m JPY libor today 

please? Thanks 

just gave him a shout, said already on it... 

thanks 

no probs 

[Yen Trader 6], can you ask [Primary 

Submitter] to drop 3m Libor by 1 bps? hold 

6m libor unchange [sic] thanks 

Yes[,] going over to his desk now[,] yup, 6s 

going unch, 3 s will drop by 1 

domo 

[Yen Trader 1/Y en Trader 6] can ask 

[Primary Submitter] to bump up 6m JPY 

libor by 1 bp 

sure 

tx 

yes 

13 For purposes of this Order, the term "request" means a request for a preferential submission for a 

patiicular tenor. 

14 The communications quoted in this Order contain shotihand trader language and many typographical 

errors. The shotihand and errors are explained in brackets within the quotations only when deemed 

necessary to assist with understanding the discussion. 

9 
The Senior Yen Trader and other Yen traders knew that they could impact the fixing of 

the daily Yen LIB OR and were aware that LIB OR submissions might be questioned by the BBA. 

In the following example, the Senior Yen Trader boasts about how RBS succeeded in moving 

six-month Yen LIBOR and then discussed what false story they could give to justifY a low 

submission if necessary: 

April2, 2008: (Emphasis added.) 

Senior Yen Trader: 

Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 1: 

Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 1 : 

Senior Yen Trader: 

Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 1: 

Senior Yen Trader: 

Senior Yen Trader: 

Senior Yen Trader: 

nice libor[.] our 6m fixing move the entire 

fixing[.] hahahah 

the BBA called to ask me about that 

today 

really? 

yes 

they complain? 

asked to speak to me about the low 6m 

rate 

no[,] just to make sure i was happy with it 

[ ... ] 

i think some banl<:s must have complain 

he called b4 any of the other banks saw 

our data[,] at about 11.15[,] to check it 

was ok 

oh then its fine 

before publishing 

i am sure some HF [hedge fund] will 

complain tomorrow .. 

tough 

we will say we lower every tenor .. 1m 3m 

6m .. we feel rbs name has very good 

credit .. no problem getting money in 

good way to boost share price! 

our 3m libor is at top end ... 6m at bottom 

end ... just the ideal level! 

ii. The Knowing Participation of Yen Manager 

As noted above, Yen Manager, a trader as well as the manager responsible for RBS's 

global Yen derivatives trading, was not only aware of improper requests for false submissions by 

others, but also personally asked RBS' s long-term tenor Yen traders located in London, 

primarily Yen Trader 2, to submit rates to benefit his positions. Yen Manager's participation in 

the attempts to manipulate is reflected below: 

August 22, 2007: 

Yen Manager: 

Yen Trader 1: 

Yen Manager: 

10 

Hi Mate, where are u calling the 6m and 3s 

Libor today ? 

i put in 1.05 and 1.15 

ok cool...is that close to consensus? 
Yen Trader 1: 

Yen Manager: 

Yen Trader 1 : 

Yen Manager: 

December 3, 2007: 

Yen Manager: 

Yen Trader 2: 

Yen Manager: 

Yen Trader 2: 

Yen Manager: 

Yen Trader 2: 

Yen Manager: 

Yen Trader 2: 

Yen Manager: 

Yen Trader 2: 

Yen Manager: 

i think my 3s are too high[,] 6s will prob be 

1.13 too[,] but i wanted high fixes today 

ok cool[,] its all a random variable for us at 

this stage it is just we have some small 

fixings 

well let me know if you have any 

preferencves [sic][,] each day 

thx will do 

for choice we want lower libors ... let the 

[Money Market] guys know pls 

sure i am setting today as [Yen Trader 1] 

and cash guy off [Primary Submitter] 

great set it nice and low 

1.02 in 6m or lower 

yeh lower 

1.01 then cant really go much lower than 

that 

ok 

u care for 1m and 3m too[?] looks to me like 

fra map pretty flat 

lower generally dude 

cool 

within the acceptable bounds 

December 13,2007: (Referencing that backup submitter is accounting for his own 

positions.) 

Yen Trader 2: 

Yen Manager: 

Yen Trader 2: 

Yen Trader 2: 

Yen Manager: 

Yen Trader 2: 

Yen Trader 2: 

Yen Trader 2: 

Yen Manager: 

Yen Trader 2: 

Yen Manager: 

11 

urn will have a word with our guy in sec[,] 

he was out yest 

get them to set where the real mkts are not 

bl**dy 1.12[,] massive rec in short end 

[Yen Trader 1] wants high still 

[ ... ] 

[Yen Trader 1] is goi[n]g 1.12 again:-( 

[ ... ] 

can you please ask him what sought [sic] of 

size fixing has he got 

200bn 

sorry that tomorrow 

50 bn today 

for 50bn he is setting so high???? 

well he has a lot tomori·ow200bn 6m and 

300bn 3m[,] so high today and tomorrow 

then collapse IMM 

we got 120bn today can u let him know that 
Yen Manager: 

Yen Trader 2: 

Yen Trader 2: 

Yen Manager: 

February 29, 2008: 

Yen Manager: 

Yen Manager: 

Yen Trader 2: 

Yen Manager: 

Yen Trader 2: 

Yen Trader 2: 

Yen Trader 2: 

Yen Trader 4: 

Yen Trader 2: 

March 18,2008: 

Yen Manager: 

Yen Trader 2: 

as long [as] these fixing are fair its fine 

... just setting crazy fixings when things are 

trading way below 

Do u want to speak to him [Yen Manager] u 

r the boss he will not listen to me 

I agree with u 

ok will speak to him 

get our boys to put higher libors then 

bought more mar asset at 28 all together we 

are long 490 

ok 

[ ... ] 

higher libor will be nice 

mkt is going to be illiquid as hell today can 

tell already 

will try 

we will go hiogh [sic] 

[ ... ] 

gave 2yr basis here so high 3s too 

yeh we are going high everything [sic] 

mng 

[Yen Manager] give us a shout when u can 

plse[,] libors calls lads here are[,] lm 

84.25[,] 3m 96.75[,] 6m 1.02[,] i ahve [sic] 

asked our guy if he can go low 

iii. The Senior Yen Trader Expected His Requests to be Followed 

The Senior Yen Trader expected his requests to be followed by the Primary Submitter 

and grew frustrated when they were not. In the following communications, the Senior Yen 

Trader and others discussed that conflicting positions with other traders, including traders 

outside ofRBS, might be why his requests for beneficial Yen LIBOR submissions were not 

being followed. To resolve internal conflicting positions and related requests, usually between 

short-end traders (i.e., Senior Yen Trader) and long-end traders (i.e., Yen Manager and Yen 

Trader 2), the Senior Yen Trader suggested engaging in offsetting transactions to minimize any 

negative impact his request might have on others. 

March 27, 2008: (Emphasis added.) 

Senior Yen Trader: 

12 

rumours going ard it seems[,] we change the 

libor lower? 

[ ... ] 
Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 1 : 

Senior Yen Trader: 

Yen Trader 1: 

Senior Yen Trader: 

Senior Yen Trader: 

Yen Trader 1: 

June 29, 2009: (Emphasis added.) 

Senior Yen Trader: 

Yen Trader 1: 

Yen Trader 1 : 

Senior Yen Trader: 

Senior Yen Trader: 

Yen Trader 1: 

dont ask[,] I was in a novation meeting and 

[Yen Trader 2] asked [Yen Trader 5] to put 

it low 

[Yen Trader 2] shud have just sq[uar]ed 

it with us if he need it lower[,] cos i dont 

think they have as big position as us next 

few weeks 

[" . ] 

cant believe he put it at 99 

[".] 

thats probably gonna cost us 200k gbp 

ive told them 

does he need it or [UBS Yen Trader] 15 ask 

him to do it? cos wanted low 

[Yen Trader 2] sais [sic] he needed low[,] it 

wont be for [UBS Yen Trader] 

[".] 

tomorrow we need to bump it way up 

high ... highest among all if possible 

they wont do that again for sure 

even tho we are short fixing .. i can cover that 

mmrng .. 

[".] 

we need to bump up all the way in the 3mth 

libor tomorrow as vfell 

we will put it in tonmorrow [sic] morning 

and no one will touch it i promise you 

i that we going low 6m! [Primary Submitter] 

hike up 2 bps 

what did [Primary Submitter] go ? 

[" . ] 

oops 

thats 0.25 hike to the libor due to us 

[".] 

maybe he wasnt on his desk and someone 

change it 

i dont understand why they do that[,] it 

happens often[,] its like they do it 

deliberately to show that they wont be told 

what to d oby [sic] us 

15 As discussed below, cetiain RBS traders were aware that a senior Yen trader at UBS ("UBS Yen 

Trader"), who was a former RBS trader, was engaged in similar attempts to manipulate Yen LffiOR and 

at times colluded with two RBS derivatives traders in an attempt to achieve a manipulated rate. 

13 
December 1, 2009: (Emphasis added.) 

Senior Yen Trader: 

Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 1 : 

Senior Yen Trader: 

Yen Trader 1 : 

Senior Yen Trader: 

whats [Primary Submitter] fixing today? 

1 lower 

all tenor? 

yes[,] says this has nothing to do with his 

fixings and wont change 

that's fine 

but is going llowert [sic] out of sympathy 

unchange 6m would be better 

iv. RBS Traders were Aware of Other Banks that were also 

Manipulating Yen LIBOR 

RBS Yen traders knew that they were engaging in wrongful conduct and that Yen LIB OR 

was being manipulated to benefit trading positions throughout the market. As the Senior Yen 

Trader, Yen Manager, and other Yen traders coordinated their requests for beneficial LIB OR 

submissions with the Primary Submitter, they discussed at times how the Yen LIB OR panel was 

a "cartel" in which rates were being "manipulated." RBS traders, including the Senior Yen 

Trader, also discussed how the UBS Yen Trader was attempting to manipulate Yen LIB OR, 

including by coordinating with others. Despite the recognition that manipulation was occurring, 

at least one RBS trader welcomed having the UBS Yen Trader in the market because his 

aggressive trading brought increased liquidity, allowing traders, such as the RBS traders, to take 

on larger positions and potentially obtain greater trading profits. Examples of such 

communications include the following: 

August 20, 2007: 

Yen Manager: 

Yen Trader 2: 

August 20, 2007: (Emphasis added.) 

Senior Yen Trader: 

Banlc A Trader: 

Banlc B Trader: 

Senior Yen Trader: 

Senior Yen Trader: 

14 

it seems to be [UBS] is pushing for these 

libors partnering up with number of cash 

guys as well [ ... ] 

yeah [UBS Yen Trader] all over it 

this libor setting is getting nutss 

[ ... ] 

im puzzled as to why 3m libor fixing not 

coming off after the FED action 

[ ... ] 

[UBS] is lending dolls through my 

currencies in 3 month do usee him doing 

the same in urs 

[ ... ] 

yes[,] he always led usd in my mkt[,] the 

jpy libor is a cartel now 

[ ... ] 

its just amazing how libor fixing can 

make you that much money 
Senior Yen Trader: 

December 5, 2007: (Emphasis added.) 

Yen Trader 2: 

Yen Trader 4: 

Yen Trader 2: 

Yen Trader 4: 

Yen Manager: 

[ ... ] 

its a cartel now in london[.] they smack all 

the 1yr irs .. and fix it very high or low 

FYI libors higher again today 

[ ... ] 

'ucksake. keep ours low ifposs. don't 

understand why needs to go up in yen 

no reason dude[,] [Bank C] and [Bank D] 

went high yest 

send the boys round 

[ ... ] 

pure manipulation going on 

v. The Primary Submitter Based Certain RBS Yen LIBOR 

Submissions on Traders' Requests or at times Based on His Own 

Trading Positions 

The Primary Submitter and his backup submitters often considered and at times based 

Yen LIB OR submissions on the rates or levels requested by the RBS Yen derivatives traders to 

benefit their trading positions, as well as to benefit their own money market and derivatives 

trading positions. The Primary Submitter knew that the Yen derivatives traders were making the 

requests to benefit their Yen derivatives trading positions. To accommodate the traders, the 

Primary Submitter often moved RBS's Yen LIBOR submissions by one or more basis points in 

the direction requested by the Yen traders, or submitted a specific rate depending on the 

particulars ofthe traders' requests. At times, RBS's false submissions affected the fixing of Yen 

LIB OR. 

As noted above, for a significant period of time many of those communications were oral, 

since the Primary Submitter was seated near the London-based Yen traders. After the Primary 

Submitter was relocated away from the Yen traders, written communications capture his ready 

acquiescence to making the LIBOR submissions based on the requests of the traders, as 

exemplified by the following chats: 

AprillS, 2009: 

Yen Trader 1: 

Primary Submitter: 

April21, 2009: 

Yen Trader 1: 

Junior Trader: 

Junior Money Markets Trader: 

Yen Trader 1: 

Primary Submitter: 

Primary Submitter: 

Yen Trader 1: 

15 

high 6s low 3s please [Primary Submitter] 

np 

can we bump up 6m libor pls 

sure what level works for you 

aahaha 

755[,] what diod we do yerst? [sic] 

75 

75 

755? 
Primary Submitter: 

Yen Trader 1: 

May 20,2009: 

Yen Trader 1 : 

Primary Submitter: 

Yen Trader 1: 

Yen Trader 1: 

Primary Submitter: 

we go 76 today 

thks 

high 3s and low 6s pis [Primary Submitter] 

no problems 

grazias amigo 

where will you lower 6s to 7 

70 

September 14 and 15, 2009: (Primary Submitter agrees to switch direction of 

submissions over two consecutive days.) 

September 14: 

Yen Trader 1: 

Primary Submitter: 

September 15: 

Yen Trader 1: 

Primary Submitter: 

Yen Trader 1 : 

September 18, 2009: 

Yen Trader 6: 

Primary Submitter: 

Yen Trader 6: 

September 23, 2009: 

Yen Trader 6: 

Primary Submitter: 

Yen Trader 6: 

September 24, 2009: 

Yen Trader 6: 

Primary Submitter: 

Yen Trader 6: 

Primary Submitter: 

Yen Trader 6: 

Yen Trader 6: 

16 

high 3s and 6s please 

ok 

can we lower our fixings today please 

[Primary Submitter] 

make your mind up[,] haha, yes no probs 

im like a whores drawers 

Morning [Primary Submitter][,] can we hike 

6m libor by 1 p today if possible 

For u yes 

hnaks [sic] [Primary Submitter] 

canwe [sic] lower 3mnth Libor by 1 bp if 

possible 

[Yen Trader 6] , sure 

thanks [Primary Submitter] 

Morning [Primary Submitter] 

HI 

Can we lower 3m and 6m libors by 1 bp if 

ppossible [sic] 

[ ... ] 

Only as its you 

:0 

:-) 
The Primary Submitter also often considered, and at times based his Yen LIB OR 

submissions on his money market and derivatives trading positions. As he commented to an 

interdealer broker in March 2010, "always suits me if anything to go lower as i rcve [sic] funds." 

vi. The Main Backup Yen LIB OR Submitter, a Yen Derivatives 

Trader, Frequently Based Submissions on Trading Positions 

Yen Trader 1 also acted as the main backup Yen LIB OR submitter when the Primary 

Submitter was either out of the office or busy with other tasks. At those times, Yen Trader 1 

often made RBS's Yen LIBOR submissions to increase the profitability of his own derivatives 

trading positions or the positions of the Senior Yen Trader, Yen Manager, or other Yen 

derivatives traders. The following examples show his close coordination with the Senior Yen 

Trader. 

August 17,2007: (Emphasis added.) 

Senior Yen Trader: 

Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 1: 

Senior Yen Trader: 

August 20,2007: (Emphasis added.) 

Yen Trader 4: 

Yen Trader 1 : 

Yen Trader 4: 

Senior Yen Trader: 

17 

we need usd libor to drop faster 

jpy libors v high[,] i set them then [Primary 

Submitter] overrides them[,] he has gone 

now for 2 weeks 

[ ... ] 

I dont think 3m jpy libor will drop that 

much[,] 3mjpy at most down 1bps 

oh no[,] not if i have anything to do with 

it[,] and i do have somethin gto do with it 

! lol 

[ ... ] 

only way is to bump up sep bucket for 

6m.jpy up more 

its at 14 already 

try 177 

hahah[,] i will keep our number sflat 

[ ... ] 

so on monday, usd libor will drop 5bps .. but 

jpy will only follow suit a few days later 

where's young [Yen Trader 1] thinking of 

setting it? 

where would you like it[,] libor that is[,] 

same as yesterday is call 

haha, glad you clarified ! mixed feelings but 

mostly I'd like it all lower so the world 

starts to make a little more sense. 

the whole HF [hedge fund] world will be 

kissing you instead of calling me if libor 

move lower 
Yen Trader 1 : 

Senior Yen Trader: 

Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 1 : 

August 22, 2007: 

Yen Manager: 

Yen Trader 1 : 

Yen Manager: 

Yen Trader 1 : 

Yen Manager: 

Yen Trader 1 : 

Yen Manager: 

December 12, 2007: 

Yen Trader 2: 

Yen Trader 2: 

Yen Trader 1: 

Yen Trader 4: 

Yen Trader 4: 

Yen Trader 2: 

Yen Trader 1 : 

Yen Trader 4: 

Yen Trader 1 : 

August 28, 2008: 

Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 1 : 

Senior Yen Trader: 

Yen Trader 1: 

18 

ok, i will move the curve down[,] 1 bp[,] 

maybe more[,] ifl can 

maybe after tomorrow fixing hehehe 

fine[,] will go with same as yesterday then 

cool 

maybe a touch higher tomorrow 

Hi Mate, where are u calling the 6m and 3 s 

Libor today ? 

i put in 1.05 and 1.15 

ok cool. .. is that close to consensus? 

i think my 3s are too high[,] 6s will pro b be 

1.13 too[,] but i wanted high fixes today 

ok cool[,] its all a random variable for us at 

this stage it is just we have some small 

fixings 

well let me know if you have any 

preferencves [sic][,] each day 

thx will do 

they r calling libm·s a bit lower heree [sic] at 

mom 

1.03 and 1.0675 

i will keep ours higher though fyg 

lower the better as usual 

oh good 

[Yen Trader 1] wants high 

sry 

[Yen Trader 1] you need high ongoing or 

just today? 

for the next week or so 

where shall we put libors 

high 3m .. .low 6m 

1s? 

low[,] so we dont need to change 1 today[,] 

pretend we forgot[,] we can change it 

tomorrow[,] assuming no one else in bank 

has any position in 1 s 

thats fine 
vii. Collusion with UBS Yen Trader 

On a number of occasions from at least early 2007 through at least mid-2009, RBS, 

through two traders, colluded with the UBS Yen Trader in coordinated attempts to manipulate 

Yen LIB OR. Another RBS derivatives trader engaged in wash trades with UBS to generate 

brokerage commissions to compensate interdealer brokers for assisting UBS's attempted 

manipulations. That same RBS derivatives trader also attempted to manipulate Yen LIB OR at 

least once by coordinating with an interdealer broker to influence the submissions of other panel 

banks. 

Beginning in early 2007 through at least late 2008, the UBS Yen Trader, who was a 

former employee ofRBS, exploited his friendship with an RBS derivatives trader, Yen Trader 2, 

in his many attempts to manipulate Yen LIBOR to his advantage. Frequently, the two traders 

discussed how changes in Yen LIB OR could benefit their respective trading positions. Through 

written communications, the UBS Yen Trader asked Yen Trader 2 to make requests of the RBS 

Primary Submitter for certain Yen LIBOR submissions that would benefit the UBS Yen Trader's 

positions. Yen Trader 2 often agreed to and did make the requests ofthe Primary Submitter. 

The Primary Submitter accommodated some ofthose requests. 16 

The following are some of the examples of collusive requests from the UBS Yen Trader: 

February 8, 2007: 

UBS Yen Trader: 

Yen Trader 2: 

UBS Yen Trader: 

UBS Yen Trader: 

Yen Trader 2: 

UBS Yen Trader: 

February 9, 2007: 

UBS Yen Trader: 

Yen Trader 2: 

UBS Yen Trader: 

can you do me a huge favour, can you ask 

your cash guys to set lm libor low for the 

next few days[,] i'll return the favour as 

when you need it[,] as long as it doesn't go 

against your fixes[,] have 30mjpy of fixes 

over the next few days 

yeah i will try 

anytime you need high 6m or whatever just 

ask[,] thanks ever so much 

[ ... ] 

really need a hand on lm lib[,] pls don't 

forget 

ok i will try my best 

cheers 

thx help lm y/day appreciated 

no wornes 

[ ... ] 

can you ask for a low lm again today pis if 

ok? todays fix is 12m[.] you need anything 

on 3m or 6m? 

16 The Primary Submitter had better relationships with other RBS traders than he had with Yen 

Trader 2. 

19 
Yen Trader 2: 

UBS Yen Trader: 

Yen Trader 2: 

UBS Yen Trader: 

Yen Trader 2: 

UBS Yen Trader: 

Yen Trader 2: 

UBS Yen Trader: 

Yen Trader 2: 

no my book is still tiny i will go for a low 

libor again[.] it suits me too as i am short the 

spreads 

ok thanks 

[ ... ] 

i told my cash guy i want low 1m and 3m 

fixes and high 6 m that suits uu right ?? 

yes absolutely, is that ok with you? we will 

be exactly the same[.] am going to talk to 

[Bank E] as well 

perfect 

cool[.] you in monday? 

yeah a bit 

ok get them to set the same fixes monday as 

well if ok 

sure 

As the following chat exemplifies, Yen Trader 2 occasionally asked the UBS Yen Trader 

to have UBS make submissions for the benefit of the trading positions of Yen Trader 2. Yen 

Trader 2 also knew that the UBS Yen Trader tried to influence the Yen LIB OR submissions of 

other panel banks to benefit his trading positions and asked the UBS Yen Trader to do the same 

for him. 

February 15, 2007: 

Yen Trader 2: 

UBS Yen Trader: 

February 21, 2007: 

Yen Trader 2: 

UBS Yen Trader: 

Yen Trader 2: 

UBS Yen Trader: 

UBS Yen Trader: 

Yen Trader 2: 

UBS Yen Trader: 

20 

how many people can u get to put this 1m 

libor low 

well us[,] [Banl( E,] and a few others i think 

what ur guys calling 3s libor[?] we need to 

get some low fixes 

.64[,] yes will ask for low low high[,] 1m 

3m6m 

our guy agrees but reckons it will be 67[,] 

not good 

no way! 

[ ... ] 

[ ... ] make sure your boys set low lm and 

3m 

will try though [Yen Trader 1/backup Yen 

LIBOR submitter] wants high 3s and 6s 

we want high 6's too? don't let [Yen Trader 

1] keep 3m high to help [Senior Yen 

Trader][,] i hate that guy 
Commencing in 2008, on at least a few occasions, the UBS Yen Trader reached out to 

another former colleague at RBS, a Sterling cash trader in London ("Sterling Cash Trader"), in 

his attempts to manipulate Yen LIBOR. The Sterling Cash Trader was a friend ofthe Primary 

Submitter, and readily agreed to help the UBS Yen Trader, asking the Primary Submitter to 

make submissions reflecting the rates specified by the UBS Yen Trader, as shown below. The 

Primary Submitter accommodated those requests. 

May 7, 2008: 

UBS Yen Trader: 

Sterling Cash Trader: 

November 3, 2008: 

UBS Yen Trader: 

Sterling Cash Trader: 

UBS Yen Trader: 

Sterling Cash Trader: 

UBS Yen Trader: 

Hi [Sterling Cash Trader] if this is you can 

you pls ask for a low 6m in jpy for the next 

few days[.] Hope you are ok, was good 

seeing you last week[.] Cheers [UBS Yen 

Trader] 

Hi mate, I mentioned it to our guy on Friday 

and he seemed to have no problem with it, 

so fingers crossed. 

can you do me a favour and ask your guys 

for a low JPY 3m fix today if they can? 

me 

wld be massiive [sic] help 

will ask 

have monster fix[.] thanks [Sterling Cash 

Trader] 

viii. Coordination with an Interdealer Broker 

In early 2010, the Sterling Cash Trader left RBS to work at an interdealer broker 

("Interdealer Broker A"). Interdealer brokers, also called voice brokers, act as intermediaries 

between buyers and sellers in the money markets and derivatives markets, including banks on the 

Yen and Swiss Franc LIB OR panels. The interdealer brokers match buyers and sellers in return 

for commissions. 17 

While working for Interdealer Broker A, on limited occasions, the now former Sterling 

Cash Trader continued to ask the Primary Submitter to submit rates favorable to the positions of 

the UBS Yen Trader, who by then had left UBS and was trading for Bank C. The Primary 

Submitter agreed to accommodate those requests. For example: 

17 Within an interdealer broker, there are brokers for different currencies who intermediate derivatives 

transactions and brokers who intermediate cash transactions. In order to find matching counterparties, 

brokers provide bid or offer prices for a financial transaction. Those prices are conveyed in multiple 

ways. Brokers use "squawk boxes," which are speakerphones that can speak simultaneously to numerous 

trading desks of their bank clients at once, to broadly disseminate bid and offer prices. Brokers also 

frequently use Bloomberg instant message chats and other messaging platforms, email, and dedicated 

telephone lines. Interdealer brokers also provide bank traders their views on pricing and market trends, 

known as "market color," and the banks rely on brokers for such information. 

21 
March 3, 2010: (Emphasis added.) 

Former Sterling Cash Trader: 

Primary Submitter: 

Fmmer Sterling Cash Trader: 

Primary Submitter: 

Former Sterling Cash Trader: 

Primary Submitter: 

Former Sterling Cash Trader: 

Primary Submitter: 

Former Sterling Cash Trader: 

Primary Submitter: 

Former Sterling Cash Trader: 

May 13, 2010: (Emphasis added.) 

Former Sterling Cash Trader: 

Primary Submitter: 

Former Sterling Cash Trader: 

Primary Submitter: 

Former Sterling Cash Trader: 

can i pick ur brain? 

yeah 

u see 3m jpy libor going anywhere btween 

nowandimm? 

looks fairly static to be honest , poss more 

pressure on upside , but not alot 

oh[,] we hve a mutual friend who'd love 

to see it go down, no chance at all? 

haha [former UBS Yen Trader at Bank 

C] by chance 

shhh 

hehehe , mine should remain flat , always 

suits me if anything to go lower as i rcve 

funds 

gotcha, thanks, and, if u cud see ur way to 

a small drop there might be a steak in it 

for ya, haha 

noted;-) 

8-) 

alloo, can i just chlc ur leaving urs unch? 

oh yes[,] might even just go lower for the 

funofit:-) 

really, how much 

Know [sic] unchanged but i knew [former 

UBS Yen Trader at Bank C] would get 

exicted [sic] by that 

ha 

ix. RBS Yen Trader 1 also Attempted to Manipulate Yen LIBOR 

through Interdealer Brokers and Engaged in Wash Trades to 

Compensate Dealers for Their Assistance 

By January 2007, Yen Trader 1 at RBS came to suspect that the UBS Yen Trader was 

using interdealer brokers to manipulate Yen LIB OR. At that time, he commented to another 

RBS trader, stating: "do you think brokers go and tell small banks where it should be?[ ... ] on 

behalf of the bigger banks i could imagine UBS telling the brokers to go and get all the small 

banks to mark libor up." Several months later, in August 2007, Yen Trader 1 commented again 

to the Senior Yen Trader about information he learned from Interdealer Broker B, "i was out 

with [Interdealer Broker B] yesterday every day [UBS Yen Trader] comes down and asks the jpy 

desk to tell all the banks to set libor low." 

Beginning a year later, from September 2008 to August 2009, as requested by at least two 

interdealer brokers, Interdealer Brokers B and C, Yen Trader 1 agreed to execute "wash" or 

22 
"switch" trades 18 with UBS, to compensate Interdealer Brokers Band C for assisting the 

attempts of the UBS Yen Trader to manipulate Yen LIB OR. 19 Examples of the communications 

between Yen Trader 1 and the interdealer brokers coordinating on wash sales include the 

following: 

September 19, 2008: 

Interdealer Broker B: 

Yen Trader 1 : 

[ ... ] 

Interdealer Broker B: 

Yen Trader 1 : 

Interdealer Broker B: 

can you do me a favour ... you're not going 

to get paid any bro for this and we'll send 

you lunch around for the whole desk. Can 

you flat ... can you switch two years semi at 

5 3/4, 100 yards [meaning 100 billion] ... 

between UBS. Just get ... take it from UBS, 

give it back to UBS. He wants to pay some 

bro. We won't bro you ... 

Yeah, yeah 

Yeah. Yeah. 100 yards ... actually can you 

make it 150 and I'll send lunch around for 

everybody? 

Yeah. 

Thanks very much. Cheers. Cheers, mate 

and you choose lunch. 

That same day, Interdealer Broker B asked Yen Trader 1 to accept wash trades with UBS 

of an additional 100 billion Yen to enable the UBS Yen Trader to pay approximately $31,000 in 

brokerage fees to Interdealer Broker Bas compensation for the latter's assistance in the 

manipulation. By agreeing to do so, Yen Trader 1 knowingly assisted the UBS Yen Trader's 

manipulative attempts because he helped ensure that the interdealer broker was compensated. 

Yen Trader 1 eventually asked Interdealer Broker B, on at least one occasion, to try to 

influence other panel banks' Yen LIB OR submissions to benefit the trading positions of Yen 

Trader 1, as is reflected below. 

June 26, 2009: 

Yen Trader 1 : 

Interdealer Broker B: 

Has [UBS Yen Trader] been asking you to 

put LIBORs up today? 

[speaking to another person] What's [UBS 

Yen Trader] want on LIBORs today? Is he 

fixing anything about LIBORs? What does 

he want? What way does he want it? 

18 Generally, a "wash" trade is a pair of offsetting trades that are intended to negate risk or price 

competition and that result in a financial nullity. One financial consequence of such trades, however, is 

that they generate commissions for the firm brokering the transactions. 

19 RBS paid brokerage commissions on some of these wash trades to maintain good relationships with 

the interdealer brokers. 

23 
Yen Trader 1 : 

Interdealer Broker B: 

Yen Trader 1: 

Interdealer Broker B: 

Yen Trader 1: 

Interdealer Broker B: 

[speaking to Yen Trader 1] Did you hear 

that? 

No. 

He wants ones, ones and threes a little bit 

lower and sixes probably about the same 

where they are now. He wants them to stay 

the same. 

I want them lower. 

You want them lower? What the sixes? 

Yeah. 

Alright, well, alright, alright, we'll work on 

it. 

Later that same day, Interdealer Broker B reported back to Yen Trader 1 as follows: 

Interdealer Broker B: 

Yen Trader 1: 

Interdealer Broker B: 

Yen Trader 1 : 

Interdealer Broker B: 

Yen Trader 1: 

Interdealer Broker B: 

Yen Trader 1: 

Interdealer Broker B: 

Hello mate, [Yen Trader 1 ]? You all set? 

Yeah. 

Right listen we've had a couple of words 

with them, you want them lower right? 

Yeah. 

Alright okay, alright listen, we've had a 

couple words with them. You want them 

lower, right? 

Yeah. 

Alright okay, alright, no we're okay just 

confirming it. We've, so far we've spoke to 

[Bank F]. We've spoke to a couple of 

people so we'll see where they come in 

alright. We've spoke, basically one second, 

basically we spoke to [Banl<: F], [Banl<: G], 

[Bank H], who else did I speak to? [Bank I]. 

There's a couple of other people that the 

boys have spoke to but as a team we've 

basically said we want a bit lower so we'll 

see where they come in alright? 

Cheers. 

Cheers no worries mate. 

Yen Trader 1 then executed a wash trade with UBS to compensate Interdealer Broker B 

for its assistance, generating about $20,000 in commissions for Interdealer Broker B. 

b. RBS's False Reporting and Manipulation of Swiss Franc LIBOR to 

Benefit Trading Positions 

On numerous occasions, from at least late 2006 through mid-2009, RBS attempted to 

manipulate Swiss Franc LIBOR to benefit the trading positions held by RBS Swiss Franc 

derivatives traders, mainly the principal Swiss Franc derivatives trader for RBS ("Swiss Franc 

24 
Trader"), and by the Primary Submitter. On a number of those occasions, RBS made false 

LIB OR submissions in furtherance of its manipulative attempts. At times, the Swiss Franc 

Trader also coordinated with a former RBS trader at another bank about Swiss Franc LIBOR 

submissions. At times, RBS succeeded in manipulating Swiss Franc LIBOR. 

i. Internal Requests to Skew Swiss Franc LIBOR Submissions 

From2007 through 2009, RBS's submissions for three and six-month tenors were 

included in the official Swiss Franc LIBOR trimmed average rate the vast majority of the time, 

as set forth in the following table: 

PERCENTAGE OF RBS SWISS FRANC LIBOR SUBMISSIONS 

INCLUDED IN FINAL LIB OR FIXING 

YEAR 3 MONTH TENOR 6 MONTH TENOR 

2007 79.1% 78.3% 

2008 86.2% 90.6% 

2009 74.7% 97.6% 

As of December 2006, the Swiss Franc Trader sat next to the Primary Submitter in 

London, as part of the STM seating arrangement. The Swiss Franc Trader and the Primary 

Submitter were the only senior traders at RBS who traded Swiss Franc LIBOR-linked financial 

instruments.20 

From the outset, consistent with the improper communications occurring with the Yen 

traders, the Primary Submitter regularly asked the Swiss Franc Trader at what level he wanted 

Swiss Franc LIBOR to be submitted that day, and the Swiss Franc Trader often asked for Swiss 

Franc LIBOR submissions that would benefit his trading positions. The requests typically 

related to the three and six-month tenors of Swiss Franc LIB OR, with occasional requests 

regarding the one-month tenor. The Primary Submitter often considered and frequently based 

RBS's Swiss Franc LIBOR submissions on the Swiss Franc Trader's requests. The Primary 

Submitter also made submissions to benefit his own money market and derivatives trading 

positions. 

Initially, the Swiss Franc Trader's frequent requests for beneficial LIBOR submissions 

were made mostly in person because he sat next to the Primary Submitter. Occasionally, if the 

Primary Submitter was away from his desk, the Swiss Franc Trader made written requests for 

beneficial Swiss Franc LIBOR submissions. The following are examples: 

December 4, 2008: 

Swiss Franc Trader: 

Primary Submitter: 

can u put 6m swiss libor in low pis? 

NO 

20 During this period, as with its Yen interest rate derivatives trading, RBS's revenues from Swiss Franc 

interest rate derivatives trading grew significantly, from over $15 million in 2007 to over $78 million in 

2009. The Swiss Franc desk also traded other Swiss Franc based products that generated additional 

significant revenue for RBS. 

25 
Swiss Franc Trader: 

Primary Submitter: 

Swiss Franc Trader: 

Primary Submitter: 

Swiss Franc Trader: 

Primary Submitter: 

Swiss Franc Trader: 

December 31, 2008: 

Swiss Franc Trader: 

Primary Submitter: 

Swiss Franc Trader: 

Swiss Franc Trader: 

should have pushed the door harder 

Whats it worth 

ive got some sushi rolls from yesterday? 

[ ... ] 

ok low 6m , just for u 

wooooooohooooooo[,] 0.01 %? thatd be 

awesome 

1.33 

perfect[.] u r a nice man 

High 3m libor pls!!!!!!! 

ok ifi must 

Yes pls 

[ ... ] 

Utheman 

In 2009, the Swiss Franc Trader began using Bloomberg chats more frequently to make 

his requests, particularly after being re-located away from the Primary Submitter. Throughout 

the first half of 2009, the requests were frequent, as often as several times per week. The 

following are examples of his many communications with the Primary Submitter: 

January 16, 2009: (To Primary Submitter.) 

Swiss Franc Trader: high 3m libor pls!!!!!! 

Swiss Franc Trader: low 6m libor pls!!!!!!!! 

January 30,2009: 

Swiss Franc Trader: 

Primary Submitter: 

Primary Submitter: 

Primary Submitter: 

Primary Submitter: 

Swiss Franc Trader: 

Swiss Franc Trader: 

Swiss Franc Trader: 

Swiss Franc Trader: 

Swiss Franc Trader: 

Swiss Franc Trader: 

Swiss Franc Trader: 

Swiss Franc Trader: 

Swiss Franc Trader: 

Primary Submitter: 

Swiss Franc Trader: 

Swiss Franc Trader: 

Swiss Franc Trader: 

Swiss Franc Trader: 

Primary Submitter: 

26 

high 3m libors pls!!!!!! 

0.50?? 

0.51 

0.52 

0.53 

0.54 

0.54 

0.54 

0.54 

0.54 

0.54 

0.54 

0.54 

and low 6m 

Ok i get ya 

0.65 

0.65 

0.65 

0.65 

ok 
Primary Submitter: 

Swiss Franc Trader: 

February 11, 2009: 

Junior Money Markets Trader: 

Swiss Franc Trader: 

March 19, 2009: 

Swiss Franc Trader: 

Primary Submitter: 

Swiss Franc Trader: 

Primary Submitter: 

Swiss Franc Trader: 

May 5, 2009: 

Swiss Franc Trader: 

Primary Submitter: 

Swiss Franc Trader: 

Primary Submitter: 

Swiss Franc Trader: 

libors as requested 

you a top dog 

chf libors anyting special? 

high 3m pls[,] 6m neutral[,] hanks thanks 

hello mr [Primary Submitter][,] can we go 

unch for libors again pls? 42 54 7 or any 

lower in 6m would make u the best guy ever 

40 52 

can we make the 3m higher pretty pretty 

please? how about 41 53 7 

ok you win 

u r the man 

can we get high 3m, low 6m pls! 

maybe 

PPPPLLLLLEEEEEAAAAASSSSEEEEEE 

ok 41 52 

perfect perfect 

ii. RBS Coordinated Swiss Franc Submissions at times with a 

Former RBS Employee at Another Bank 

The Swiss Franc Trader also discussed and coordinated trading with a former RBS trader 

who traded Swiss Franc derivatives for a different LIB OR panel banlc, Bank E. Through neardaily Bloomberg chats, the two traders discussed their respective Swiss Franc trading positions 

which were linked to LIBOR. In the following communications, the two traders also discussed 

their preferred Swiss Franc LIB OR rates, the amount of the potential benefit they could receive 

from such rates, and the requests they made of their respective submitters: 

July 4, 2007: (To BankE Swiss Franc Trader.) 

Swiss Franc Trader: yes .. they called 3m libor unchanged this 

morn[,] so i complained[,] so its all moved 

July 24, 2007: 

Bank E Swiss Franc Trader: 

Swiss Franc Trader: 

Banlc E Swiss Franc Trader: 

Swiss Franc Trader: 

Bank E Swiss Franc Trader: 

27 

1m libor not a bit high? 

yes it s ajoke. im so annoyed 

This is shittt[,] With a fwd of 29.2 should be 

pretty much same as yesterday no? 

yep [ ... ] lm libor should not be higher 

I told them 
Swiss Franc Trader: 

BankE Swiss Franc Trader: 

Swiss Franc Trader: 

April15, 2008: 

Banlc E Swiss Franc Trader: 

Swiss Franc Trader: 

Banlc E Swiss Franc Trader: 

Swiss Franc Trader: 

Banlc E Swiss Franc Trader: 

Swiss Franc Trader: 

Bank E Swiss Franc Trader: 

October 21,2008: 

Swiss Franc Trader: 

Banlc E Swiss Franc Trader: 

Swiss Franc Trader: 

March 17,2009: 

Swiss Franc Trader: 

Banlc E Swiss Franc Trader: 

Swiss Franc Trader: 

what they say? i moaned too .. they had 6m 

libor at 85 .. i was gonna lose 1.25 bps on 2k 

futs 

Where should 6m be then? I need it low 

well 6m 3s irs is 86.4 .. so you will still make 

0.4 ag fix 

you know what i hope[,] that libor 3m is not 

going up 

[ ... ] 

Yes .. Should not go up.. Just hang here 

ok[,] just weird that zurich put it at 2. 77 

today 

So fx basis will go negative if 3m usd ever 

starts to go down 

[ ... ] 

you should tell [Primary Submitter][,] if you 

can[,] the set it at 2. 78 

[ ... ] 

I ask him for low today[,] 3m and 6m 

hahah[,] 'yes ok mate i am heading out for a 

run[,] enjoy[,] talk tom[,] get those fixings 

down 

we need that libor down fast 

yes[,] exactly 

[ ... ] 

and [Primary Submitter] says he will set 

lower 

we need a few days unch 

yes 

i ask [Primary Submitter] now to fix unch 

every day 

May 14, 2009: (Related Bloomberg chats reflecting attempts to manipulate Swiss Franc 

LIB OR.) 

Chat With Primary Submitter: 

Swiss Franc Trader: 

Swiss Franc Trader: 

Primary Submitter: 

28 

[Primary Submitter] pls can we get super 

high 3m[,] super low 6m 

PRETTY PLEASE! 

41 & 51 
Swiss Franc Trader: 

Primary Submitter: 

Swiss Franc Trader: 

Primary Submitter: 

Swiss Franc Trader: 

Primary Submitter: 

if u did that[,] i would lvoe [sic] u forever 

41 & 55 then ... 

if u did that i would come over there and 

make love to you[,] your choice 

41 +51 it is 

thouht [sic] so 

so shallow 

Chat With Bank E Swiss Franc Trader: 

Swiss Franc Trader: 

Banlc E Swiss Franc Trader: 

Swiss Franc Trader: 

Bank E Swiss Franc Trader: 

we are good! 

yes[,] look at it now[,] low libor[,] and chf 

libor good too [ ... ] 

[Primary Submitter] did me big favour 

today[,] he set 41 and 51 

sweet 

c. RBS Attempted to Manipulate LIBOR after the Press Became 

Critical of Banks' LIBOR Submissions and after Being Placed on 

Notice of the CFTC's Investigation 

During the global financial crisis commencing in approximately late summer 2007, the 

press began raising questions about panel banks' LIBOR submissions. For example, in April of 

2008, the Wall Street Journal published an article entitled LIBOR Fog Bankers Cast Doubt On 

Key Rate Amid Crisis that questioned the integrity of panel banks' LIBOR submissions and 

whether panel banks were making LIBOR submissions for improper purposes. In the wake of 

the increased media attention, the BBA conducted some reviews of LIB OR practices, in which 

RBS pmiicipated. In April 2010, the CFTC asked RBS to conduct an internal investigation of its 

U.S. Dollar LIBOR practices. 

Despite the increased scrutiny from the media and the BBA, and notwithstanding the 

CFTC's investigation, RBS continued the manipulative activity throughout the financial crisis. 

With respect to at least Yen LIBOR, RBS's manipulative activity continued into late 2010, and 

for some other benchmark interest rates into August 2011. 21 As of the summer of2010, RBS 

Yen traders knew about and discussed an investigation into RBS's U.S. Dollar LIBOR 

submission practices, which was the CFTC's investigation. As the following examples show, the 

RBS Yen traders became careful about their communications to avoid detection and decided that 

they could ignore the on-going investigation for now: 

September 24, 2010: 

Senior Yen Trader: 

Yen Trader 1: 

hey [Yen Trader 1 ], can you ask [Primary 

Submitter] to push 6m JPY Lib or up 2 bps 

to 44 

[ ... ] 

ha ... will mention it ... no emails anymore ... 

after [UBS Yen Trader] 

21 Other conduct related to SIB OR and SOR referenced in note 2 supra occurred as late as August 2011. 

29 
Senior Yen Trader: 

Yen Trader 1: 

Yen Trader 1: 

Senior Yen Trader: 

Yen Trader 1 : 

November 22, 2010: (Emphasis added.) 

Senior Yen Trader: 

Yen Trader 1 : 

Senior Yen Trader: 

Yen Trader 1 : 

Senior Yen Trader: 

Yen Trader 1 : 

Senior Yen Trader: 

Yen Trader 1: 

haha ... i heard he called up BBA to ask 

them to change the way they fix the libor ... 

in not so polite request 

hahah 

[ ... ] 

what would he want them to change to 

to suit his book I guess 

but how ... put him on fixing board ... just 

him ... haha 

hey ... you think we be able to convince 

[Primary Submitter] to change the libor 

today? 

i can try 

need to drop 3mth Libor and hike 6m Libor 

he dropped 6m by 2 bps last Friday 

at the moment the FED are all over us 

about libors 

thats for the USD? 

ye[]s 

dun think anyone cares the JPY libor 

not yet[,] i will walk over ot [sic] them 

By the end of 2010, the Primary Submitter became sufficiently cautious to feign refusal 

of a written request of the Senior Yen Trader for a false LIB OR submission, only then to 

promptly telephone and assure his cohort that he was only playacting on the chat to avoid 

detection, and would follow through on the request. 

November 24,2010: 

Senior Yen Trader: 

Primary Submitter: 

Senior Yen Trader: 

November 24, 2010: (Audio recording.) 

Senior Yen Trader: 

Primary Submitter: 

Senior Yen Trader: 

Primary Submitter: 

30 

was wondering if it suits you guys on hiking 

up 1 bp on the 6mth Lib or in JPY ... it will 

help our position tremendously 

how you doing with all the volatilities these 

days? ... to be honest happy with levels we 

see at the moment 

ok no prob ... wouldn't want to cause any 

problem ... thanks mate 

Hello? 

Morning, [Senior Yen Trader]? Hi, 

[Primary Submitter}. 

Yeah, how are you? 

I'm pretty good sir. Very Good. We're just 

not, we're not allowed to have those 

conversations on [instant messages]. 
Senior Yen Trader: 

Primary Submitter: 

Senior Yen Trader: 

Primary Submitter: 

Senior Yen Trader: 

Primary Submitter: 

Senior Yen Trader: 

Oh, sony about that. I didn't know. 

(laughter) 

(laughter) Oh because of the, the BBA 

thing? 

Yes, exactly. 

Ah, ok ok. 

So yeah, leave it with me, and uh, it won't 

be a problem. 

Ok, great. 

d. The Manipulation and False Reporting of Yen and Swiss Franc 

LIB OR 

As evidenced above, the RBS Yen and Swiss Franc traders and the Primary Submitter 

and backup submitters regularly attempted to manipulate Yen and Swiss Franc LIB OR for 

certain tenors- one-month, three-month and six-month- primarily through the internal requests 

of the derivatives traders which the submitters often accommodated. Likewise, the Primary 

Submitter also based his Yen and Swiss Franc LIBOR submissions on the benefit to his own 

money market and derivatives trading positions. In addition, certain RBS traders coordinated 

with traders at other panel banks and interdealer brokers about LIBOR submissions, all in 

attempts to manipulate Yen and Swiss Franc LIB OR. 

RBS made these repeated attempts to manipulate in order to affect the official fixing of 

Yen and Swiss Franc LIB OR at a rate that would benefit its derivatives and money market 

trading positions, or other panel banks' trading positions. At times, RBS was successful in its 

attempts to manipulate the official Yen and Swiss Franc LIB OR fixing for a particular tenor. 

RBS, through its derivatives traders and submitters, knew it was improper to consider 

derivatives trading positions in determining the bank's LIBOR submissions. A bank's financial 

derivatives trading positions are not legitimate or permissible factors on which to base a banlc's 

daily LIB OR submissions. By basing its Yen and Swiss Franc LIB OR submissions on rates that 

benefited RBS's or any other banlc's derivatives positions, RBS's submissions were not made in 

accordance with the BBA definition and criteria for LIBOR submissions. Instead, RBS 

knowingly conveyed false, misleading or knowingly inaccurate reports that its submitted rates 

for Yen and Swiss Franc LIB OR were based on and solely reflected its assessment of the costs of 

borrowing unsecured funds in the relevant interbanlc money markets. Accordingly, RBS 

regularly attempted to manipulate, and at times succeeded in manipulating the official Yen and 

Swiss Franc LIB OR fixings in particular tenors, and knowingly delivered false, misleading or 

knowingly inaccurate reports concerning Yen LIB OR and Swiss Franc LIBOR, commodities in 

interstate commerce. 

e. RBS Lacked Internal Controls, Failed to Implement Controls and 

Allowed Conflicts of Interest to Exist 

During the relevant period, RBS allowed conflicts of interest to exist, failed to adequately 

supervise its derivatives traders, LIB OR submitters and the LIB OR submission process, and did 

not have any policies, internal controls or procedures for determining or monitoring its LIBOR 

31 
submissions to ensure that RBS's submissions reflected an honest assessment of the costs of 

borrowing unsecured funds in the London interbank market. Despite the media speculation and 

BBA inquiries as well as the Commission investigation and other regulatory inquiries, RBS did 

not have any policies regarding its LIBOR submissions process or improve its internal controls 

until March 2011, and did not materially strengthen those policies or controls until June of 2011. 

RBS did not identify or address the risk of money market traders' compensation being partly 

based on LIBOR referencing transactions until2012. 

RBS allowed conflicts of interest to exist and affect its LIB OR submissions. The 

creation of STM, which placed derivatives traders with the money market traders for the purpose 

of, among other things, increasing communications among them about market conditions, 

created a situation where derivatives traders with a profit motive could communicate with money 

market traders who had the responsibility to determine RBS's LIBOR in accordance with the 

BBA's definitions and criteria. The Primary Submitter had his own conflict of interest, as he 

held derivatives and money market positions tied to Yen and Swiss Franc LIBOR. RBS's lack 

of supervision of STM and the LIB OR submission process allowed the derivatives traders to 

successfully pressure the Primary Submitter to accommodate them. Indeed, for almost the entire 

period, it was unclear who had the day-to-day responsibility for supervising the Primary 

Submitter. When it was clear, no supervision was provided. During the STM period, RBS' s 

organizational structure had the Primary Submitter reporting to two managers, one located in 

London who created STM and was the London short-term derivatives trading manager, and the 

other located in Asia, who was a money market manager. The Primary Submitter believed he 

reported to both of them. Neither one of those managers, however, acknowledged responsibility 

for managing him. Neither knew who made the Yen or Swiss Franc LIBOR submissions when 

the Primary Submitter was absent. After STM was disbanded, the U.S. Dollar LIBOR submitter 

was given supervisory responsibility for the Primary Submitter. Again, no supervision was 

provided. In addition, derivatives traders acted as the backup submitters, which presented a 

conflict of interest between their profit motive and the responsibility to make honest LIB OR 

submissions. 

In 2008 and again in 2009, after the media questioned the integrity ofLIBOR and the 

panel banks' submissions, the BBA reviewed its LIBOR submissions process and issued new 

guidance governing how banks should make LIBOR submissions. RBS participated in the 

reviews and sat on the FX & MM and Steering Committees for the BBA. In April 2010, RBS 

received the Commission's request that it conduct an internal investigation of its U.S. Dollar 

LIB OR practices. Yet RBS did not implement policies or internal controls until March 2011, 

and RBS's traders and submitters continued to attempt to manipulate LIBOR into late 2010 and 

other benchmark interest rates well into 2011. For example, throughout the relevant period, RBS 

failed to provide its benchmark interest rate submitters with any training or supervision related to 

the setting of LIB OR, factors to be considered in the setting of LIB OR, or the LIB OR 

submission process in general. RBS also did not require documentation of its submitters' 

LIBOR determinations. Finally, RBS failed to provide its employees with any training regarding 

appropriate communications between derivatives traders and LIBOR submitters. This lack of 

supervision and training permitted RBS employees to knowingly make repeated false Yen and 

Swiss Franc LIBOR submissions for years. 

32 
IV. 

LEGAL DISCUSSION 

A. RBS Made False, Misleading or Knowingly Inaccurate Reports Concerning the 

Costs of Borrowing Unsecured Funds in Violation of Section 9(a)(2) of the Act 

Section 9(a)(2) of the Act makes it unlawful for any person "knowingly to deliver or 

cause to be delivered for transmission through the mails or interstate commerce by telegraph, 

telephone, wireless, or other means of communication false or misleading or knowingly 

inaccurate reports concerning crop or market information or conditions that affect or tend to 

affect the price of any commodity in interstate commerce .... " 7 U.S.C. § 13(a)(2) (2006); 

United States v. Brooks, 681 F.3d 678, 691 (5th Cir. 2012); United States v. Valencia, 394 F.3d 

352, 354-355 (5th Cir. 2004); see also CFTC v. Johnson, 408 F. Supp. 2d 259, 267 (S.D. Tex. 

2005) (same). 

On a daily basis, RBS, through the transmission of an electronic spreadsheet to the 

service provider of the BBA, who calculates their official fixings (i.e., Thomson Reuters), 

knowingly delivered or caused to be delivered its Yen and Swiss Franc LIB OR submissions 

through the mails or interstate commerce. RBS's submissions were also caused to be delivered 

through the mails or interstate commerce through the daily dissemination and publication 

globally, including into the United States, of the panel banks' submissions as well as the daily 

official benchmark interest rates by at least Thomson Reuters on behalf of the BBA and other 

third party vendors. The panel banks' submissions are used to determine the official published 

rates for LIBOR which are calculated based on a trimmed average ofthe submissions. RBS's 

daily LIBOR submissions contained market information concerning the costs of borrowing 

unsecured funds in particular currencies and tenors, the liquidity conditions and stress in the 

money markets, and RBS's ability to borrow funds in the particular markets. Such market 

information affects or tends to affect the prices of commodities in interstate commerce, including 

the daily rates at which Yen LIB OR and Swiss Franc LIB OR are fixed. 

At times, during the periods relevant to the conduct described herein, RBS 's submissions 

for certain tenors of Yen and Swiss Franc LIB OR were false, misleading or knowingly 

inaccurate because they were based in whole or in part on impermissible and illegitimate factors, 

specifically RBS's derivatives and money market trading positions. By using these 

impermissible and illegitimate factors in making its LIBOR submissions, RBS at times conveyed 

false, misleading or knowingly inaccurate information that the rates it submitted were based on 

and related solely to the costs of borrowing unsecured funds in the relevant markets and were 

truthful and reliable. Moreover, RBS traders, submitters and at least one manager knew that 

certain RBS LIBOR submissions contained false, misleading and knowingly inaccurate 

information concerning the submitted rates. By such conduct, Respondents violated Section 

9(a)(2) of the Act, 7 U.S.C. § 13(a)(2) (2006). 

B. RBS Manipulated Yen and Swiss Franc LIBOR.at Times for Certain Tenors 

Together, Sections 6(c), 6(d), and 9(a)(2) of the Act prohibit acts of manipulation or 

attempted manipulation. Section 9(a)(2) of the Act makes it unlawful for "[a]ny person to 

33 
manipulate or attempt to manipulate the price of any commodity in interstate commerce, or for 

future delivery on or subject to the rules of any registered entity .... " 7 U.S.C. § 13(a)(2) 

(2006). Section 6( c) of the Act authorizes the Commission to serve a complaint and provide for 

the imposition of, among other things, civil monetary penalties and cease and desist orders if the 

Commission "has reason to believe that any person ... is manipulating or attempting to 

manipulate or has manipulated or attempted to manipulate the market price of any commodity, in 

interstate commerce, or for future delivery on or subject to the rules of any registered entity, ... 

or otherwise is violating or has violated any of the provisions of [the] Act .... " 7 U.S.C. § 9 

(2006). Section 6(d) ofthe Act is substantially identical to Section 6(c). See 7 U.S.C. § 13b 

(2006). 

Manipulation under the Act is the "intentional exaction of a price determined by forces 

other than supply or demand." Frey v. CFTC, 931 F.2d 1171, 1175 (7th Cir. 1991). The 

following four elements must be met, by a preponderance of the evidence, to show a successful 

manipulation has occurred: 

(1) the [respondent] had the ability to influence market prices; 

(2) the [respondent] specifically intended to do so; 

(3) artificial prices existed; and 

(4) the [respondent] caused an artificial price. 

In re Cox, [1986-1987 Transfer Binder] Comm. Fut. L. Rep. (CCH) 123,786, at 34,061 

(CFTC July 15, 1987). The test for manipulation, however, is a practical one: 

We think the test of manipulation must largely be a practical one if the 

purposes of the Commodity Exchange Act are to be accomplished. The 

methods and techniques of manipulation are limited only the ingenuity of 

man. The aim must be therefore to discover whether conduct has been 

intentionally engaged in which has resulted in a price which does not 

reflect basic forces of supply and demand. 

Cargill v. Hardin, 452 F.2d 1154, 1163 (8th Cir. 1971). 

"[I]ntent is the essence of manipulation." Indiana Farm Bureau Cooperative Ass 'n, Inc., 

[1982-1984 Transfer Binder] Comm. Fut. L. Rep (CCH) 121,796, at 27,282 (CFTC Dec. 17, 

1982). The manipulator's intent separates "lawful business conduct from unlawful manipulative 

activity." !d. at 27,283. To prove the intent element of manipulation, it must be shown that RBS 

"acted (or failed to act) with the purpose or conscious object of causing or effecting a price or 

price trend in the market that did not reflect the legitimate forces of supply and demand." !d. 

The Commission has observed that "intent must of necessity be inferred from the 

objective facts and may, of course, be inferred by a person's actions and the totality of the 

circumstances." In re Hohenberg Bros., [1975-1977 Transfer Binder] Comm. Fut. L. Rep. 

(CCH) 120,271, at 21,477 (CFTC Feb. 18, 1977). "[O]nce it is demonstrated that the alleged 

manipulator sought, by act or omission, to move the market away from the equilibrium or 

efficient price - the price which reflects market forces of supply and demand - the mental 

element of manipulation may be inferred." Indiana Farm Bureau Cooperative Ass 'n, Inc., 

34 
[1982-1984 Transfer Binder] Comm. Fut. L. Rep (CCH) at 27,283. "It is enough to present 

evidence from which it may reasonably be inferred that the accused 'consciously desire[ d) that 

result, whatever the likelihood of that result happening from his conduct.'" !d. (quoting United 

States v. United States Gypsum Co., 438 U.S. 442,445 (1978)). A profit motive may also be 

evidence of intent, although profit motive is not a necessary element of an attempted 

manipulation. See In re DiPlacido [2007-2009 Transfer Binder] Comm. Fut. L. Rep. (CCH) ~ 

30,970, at 62,484 (CFTC Nov. 5, 2008) (citing In re Hohenberg Bros. Co., (CCH) ~ 20,271, at 

21,478)), aff'd, 364 Fed. Appx. 657, No. 08-5559-ag, 2009 WL 3326624 (2d Cir. 2009). 

An artificial price (also termed a "distorted" price) is one "that does not reflect market or 

economic forces of supply and demand." In re Cox, [1986-1987 Transfer Binder] Comm. Fut. L. 

Rep. (CCH) at 34,064; Indiana Farm Bureau Cooperative Ass 'n, Inc., [1982-1984 Transfer 

Binder] Comm. Fut. L. Rep (CCH) at 27,288 n. 2. As the Commission noted with approval in 

DiPlacido, ~ 30,970, at 62,484 (quoting Indiana Farm Bureau Cooperative Ass 'n, Inc., [1982-

1984 Transfer Binder] Comm. Fut. L. Rep (CCH) at 27,300 (Commissioner Stone concurring)), 

a Commissioner has commented: "[t]his is more an axiom than a test." In determining whether 

an artificial price has occurred: 

[O]ne must look at the aggregate forces of supply and demand and search 

for those factors which are extraneous to the pricing system, are not a 

legitimate part of the economic pricing of the commodity, or are extrinsic 

to that commodity market. When the aggregate forces of supply and 

demand bearing down on a particular market are all legitimate, it follows 

that the price will not be miificial. On the other hand when a price is 

effected by a factor which is not legitimate, the resulting price is 

necessarily artificial. Thus, the focus should not be as much on the 

ultimate price as on the nature of the factors causing it. 

Indiana Farm Bureau Cooperative Ass'n, Inc., [1982-1984 Transfer Binder] Comm. Fut. L. Rep 

(CCH) at 27,288 n.2. See also In re DiPlacido [2007-2009 Transfer Binder] Comm. Fut. L. Rep. 

(CCH) at 62,484 (finding that the placement of uneconomic bids or offers results in artificial 

prices because those prices are not determined by the free forces of supply and demand on the 

exchange). 

Causation of artificial prices is established when it is demonstrated that miificial market 

prices resulted from the conduct of a trader, or group of traders acting in concert, rather than 

legitimate forces of supply and demand. See Cargill, Inc. v. Hardin, 452 F.2d 1154, 1171-72 

(8th Cir. 1971) (price squeeze "intentionally brought about and exploited by Cargill"); In re Cox, 

[1986-1987 Transfer Binder] Comm. Fut. L. Rep. (CCH) at 34,067 (proof of causation requires 

the Division to show that "the respondents' conduct 'resulted in' artificial prices"). 

There can be multiple causes of an artificial price. In re DiPlacido [2007-2009 Transfer 

Binder] Comm. Fut. L. Rep. (CCH) at 62,485. The manipulator's actions need not be the sole 

cause of the artificial price. "It is enough for purposes of a finding of manipulation in violation 

of Sections 6(b) and 9 of the Act that respondents' action contributed to the price [movement]." 

In re Kosuga, 19 A.D. 603, 624 (1960); see also In re Cox, [1986-1987 Transfer Binder] Comm. 

Fut. L. Rep. (CCH) at 34,066 (recognizing there can be multiple causes of an artificial price and 

35 
holding that a charge of manipulation can be sustained where respondents' acts are a proximate 

cause of the artificial price). 

Here, as a member of the BBA's Yen and Swiss Franc LIBOR panels, RBS made daily 

submissions that purported to reflect its assessments of the costs of borrowing unsecured funds in 

the London interbank market for Yen and Swiss Franc LIB OR across tenors. The official 

LIBOR fixings are calculated using a trimmed average methodology applied to the rates 

submitted by the panel banks. By virtue of this methodology, RBS had the ability to influence or 

affect the rate that would become the official Yen and Swiss Franc LIB OR for any tenor. 

As evidenced by the extensive communications and other facts set forth above, in making 

the false Yen and Swiss Franc LIB OR submissions, several RBS derivatives traders and 

submitters specifically intended to affect the daily Yen and Swiss Franc LIB OR for certain 

tenors, including one-month, three-month, and six-month. Their intent is also made clear by the 

evidence that the derivatives traders and submitters' motives were to benefit RBS's derivatives 

and at times money market trading positions, or, at times, the derivatives trading positions of 

other panel banks with whom certain RBS derivatives traders colluded. 

On certain occasions, RBS's false, misleading or knowingly inaccurate Yen and Swiss 

Franc LIB OR submissions were illegitimate factors in the pricing of the daily Yen and Swiss 

Franc LIB OR fixings and affected the official Yen and Swiss Franc LIB OR for certain tenors, 

resulting in artificial Yen and Swiss Franc LIB OR fixings. Thus, RBS' s actions were a 

proximate cause ofthe artificial Yen and Swiss Franc LIBOR fixings. 

Accordingly, on certain occasions, RBS manipulated Yen and Swiss Franc LIB OR for 

certain tenors, commodities in interstate commerce, in violation of Sections 6( c), 6( d), and 

9(a)(2) of the Act. 

C. RBS Attempted to Manipulate Yen and Swiss Franc LIBOR 

To prove attempted manipulation, two elements are required: (1) an intent to affect the 

market price; and (2) an overt act in furtherance of that intent. See In re Hohenberg Bros. Co. 

[1975-77 Transfer Binder] Comm. Fut. L. Rep. (CCH) ~ 20,271, at 21,477 (CFTC Feb. 18, 

1977); CFTCv. Bradley, 408 F. Supp. 2d 1214, 1220 (N.D. Okla. 2005). The intent standard is 

the same as that for manipulation. See Indiana Farm Bureau and Hohenberg Bros., supra. 

As found above, several RBS derivatives traders and submitters specifically intended to 

affect the rate at which the daily LIB OR for Yen and Swiss Franc would be fixed to benefit 

RBS's derivatives trading and, at times, money market positions or to benefit the derivatives 

trading positions of colluding traders at other banks. The RBS derivatives traders' requests for 

beneficial Yen and Swiss Franc LIB OR submissions and the RBS submitters making 

submissions based on those requests constitute overt acts in fmiherance of their intent to affect 

the fixings of LIB OR for those currencies. By doing so, RBS engaged in repeated acts of 

attempted manipulation in violation of Sections 6(c), 6(d), and 9(a)(2) of the Act, 7 U.S.C. §§ 9, 

13b, and 13(a)(2) (2006). 

36 
D. Respondents Aided and Abetted the Attempts of Traders at Other Banks to 

Manipulate Yen and Swiss Franc LIBOR 

Pursuant to Section 13(a) of the Act, RBS aided and abetted the attempts of traders at 

other banks to manipulate Yen and Swiss Franc LIBOR in violation ofthe Act. 7 U.S.C. 

§ 13c(a) (2006). Liability as an aider and abettor requires proofthat: (1) the Act was violated; 

(2) the aider and abettor had knowledge of the wrongdoing underlying the violation; and (3) the 

aider and abettor intentionally assisted the primary wrongdoer. See In re Nikkhah, [1999-2000 

Transfer Binder] Comm. Fut. L. Rep. (CCH) ,-r 28,129, at 49,888 n.28 (CFTC May 12, 2000). 

Although actual knowledge of the primary wrongdoer's conduct is required, knowledge of the 

unlawfulness of such conduct need not be demonstrated. See In re Lincolnwood Commodities, 

Inc., [1982-1984 Transfer Binder] Comm. Fut. L. Rep. (CCH) ,-r 21,986, at 28,255 (CFTC Jan. 

31, 1984). Knowing assistance can be inferred from the surrounding facts and circumstances. 

I d. 

As evidenced by the communications set fmih above, certain RBS Yen and Swiss Franc 

derivatives traders and derivatives traders at other panel banks coordinated about Yen and Swiss 

Franc LIBOR rates that would benefit their banks' respective derivatives trading positions. At 

times, the traders at the other panel banks asked the RBS traders to have RBS LIBOR submitters 

submit a certain rate, or submit a rate in a direction higher or lower, that would benefit the 

derivatives' positions of the traders at the other panel banks. The RBS Yen derivatives traders 

agreed and made the requests of the RBS submitters, and at times, those requests were 

accommodated by the RBS submitters. Accordingly, by seeking to affect the rates at which Yen 

and Swiss Franc LIB OR were fixed, traders at other banks attempted to manipulate Yen and 

Swiss Franc LIBOR in violation of Sections 6(c), 6(d), and 9(a)(2) of the Act, 7 U.S.C. §§ 9, 

13b, and 13(a)(2) (2006). Certain RBS Yen and Swiss Franc derivatives traders had knowledge 

of and intentionally assisted the attempts of the traders at the other banks to manipulate the rates 

at which LIB OR was fixed. In addition, at least one RBS Yen trader knowingly assisted the 

UBS Yen Trader in his attempts to manipulate Yen LIB OR by agreeing to act as counterparty to 

wash trades opposite UBS to provide extra brokerage commissions to the interdealer brokers as 

payment for their assistance in trying to manipulating Yen LIBOR. By such acts of those RBS 

Yen and Swiss Franc derivatives traders, RBS aided and abetted the attempts of traders at other 

banks to manipulate LIBOR in violation of Sections 6(c), 6(d), and 9(a)(2) ofthe Act, 7 U.S.C. 

§§ 9, 13b, and 13(a)(2) (2006). 

E. The Royal Bank of Scotland pic and RBS Securities Japan Limited Are Liable for 

the Acts of their Agents 

Section 2(a)(1)(B) ofthe Act, 7 U.S.C. § 2(a)(1)(B), and Regulation 1.2, 17 C.P.R. § 1.2 

(2012), provide that the act, omission, or failure of any official, agent or other person acting for 

any individual, association, pminership, corporation or trust within the scope of his employment 

or office shall be deemed the act, omission or failure of such individual, association, partnership, 

corporation or trust. Pursuant to Section 2( a)(l )(B) of the CEA and Commission Regulation 1 .2, 

strict liability is imposed on principals for the actions of their agents. See, e.g., Rosenthal & Co. 

v. CFTC, 802 F.2d 963, 966 (7th Cir. 1986); Dohmen-Ramirez & Wellington Advismy, Inc. v. 

CFTC, 837 F.2d 847, 857-58 (9th Cir. 1988). 

37 
The Royal Bank of Scotland plc and RBS Securities Japan Limited are liable for the acts, 

omissions and failures of the traders, managers and submitters who acted as their employees 

and/or agents in the conduct described above and accordingly, violated Sections 6(c), 6(d), and 

9(a)(2) of the Act, 7 U.S.C. §§ 9, 13b, and 13(a)(2) (2006), as set forth above. 

v. 

FINDINGS OF VIOLATIONS 

Based on the foregoing, the Commission finds that Respondents violated Sections 6( c), 

6(d), and 9(a)(2) ofthe Act, 7 U.S.C. §§ 9, 13b, and 13(a)(2) (2006). 

VI. 

OFFER OF SETTLEMENT 

Respondents, without admitting or denying the findings or conclusions herein, except to 

the extent Respondents admit those findings in any related action against RBS by, or any 

agreement with, the Department of Justice or any other governmental agency or office, has 

submitted the Offer in which they: 

A. Acknowledge receipt of service of this Order; 

B. Admit the jurisdiction of the Commission with respect to all matters set forth in this 

Order and for any action or proceeding brought or authorized by the Commission based 

on violation of or enforcement of this Order; 

C. Waive: 

1. the filing and service of a complaint and notice of hearing; 

2. a hearing; 

3. all post-hearing procedures; 

4. judicial review by any court; 

5. any and all objections to the participation by any member of the Commission's 

staff in the Commission's consideration ofthe Offer; 

6. any and all claims that they may possess under the Equal Access to Justice Act, 5 

U.S.C. § 504 (2006) and 28 U.S.C. § 2412 (2006), and/or the rules promulgated by 

the Commission in conformity therewith, Pmi 148 of the Commission's 

Regulations, 17 C.P.R.§§ 148.1-30 (2012), relating to, or arising from, this 

proceeding; 

7. any and all claims that they may possess under the Small Business Regulatory 

Enforcement Fairness Act of 1996, Pub. L. No. 104-121, §§ 201-253, 110 Stat. 

38 
847, 857-868 (1996), as amended by Pub. L. No. 110-28, § 8302, 121 Stat. 112, 

204-205 (2007), relating to, or arising from, this proceeding; and 

8. any claims of Double Jeopardy based on the institution of this proceeding or the 

entry in this proceeding of any order imposing a civil monetary penalty or any 

other relief; 

D. Stipulate that the record basis on which this Order is entered shall consist solely of the 

findings contained in this Order to which Respondents have consented in the Offer; and 

E. Consent, solely on the basis of the Offer, to the Commission's entry of this Order that: 

1. makes findings by the Commission that Respondents violated Section 6( c), 6( d), 

and 9(a)(2) of the Act, 7 U.S.C. §§ 9, 13b, and 13(a)(2) (2006); 

2. orders Respondents to cease and desist from violating Sections 6(c), 6(d), and 

9(a)(2) ofthe Act, 7 U.S.C. §§ 9, 13b, and 13(a)(2) (2006); 

3. orders Respondents, jointly and severally, to pay a civil monetary penalty in the 

amount of Three Hundred Twenty Five Million U.S. Dollars ($325,000,000) plus 

post-judgment interest; and 

4. orders Respondents and their successors and assigns to comply with the 

conditions and unde1iakings consented to in the Offer and as set forth in Part VII 

of this Order. 

Upon consideration, the Commission has determined to accept the Offer. 

VII. 

ORDER 

Accordingly, IT IS HEREBY ORDERED THAT: 

A. Respondents shall cease and desist from violating Sections 6(c), 6(d), and 9(a)(2) of the 

Act, 7 U.S.C. §§ 9, 13b, and 13(a)(2) (2006) of the Act. 

B. Respondents, jointly and severally, shall pay a civil monetary penalty of Three Hundred 

Twenty Five Million U.S. Dollars ($325,000,000) within ten (10) days ofthe date of 

entry of this Order (the "CMP Obligation").22 If the CMP Obligation is not paid in full 

within ten (10) days of the date of entry of this Order, then post judgment interest shall 

accrue on the CMP Obligation beginning on the date of entry of this Order and shall be 

determined by using the Treasury Bill rate prevailing on the date of entry of this Order 

22 Effective June 18, 2008, the Act imposes a $1,000,000 civil monetary penalty for each act of 

attempted and completed manipulation in violation of the Act. Many ofRBS's violations of the Act for 

attempted and completed manipulation occurred after June 18, 2008. 

39 
pursuant to 28 U.S.C. § 1961 (2006). Respondents shall pay the CMP Obligation by 

electronic funds transfer, U.S. postal money order, certified check, bank cashier's check, 

or bank money order. If payment is to be made other than by electronic funds transfer, 

then the payment shall be made payable to the Commodity Futures Trading Commission 

and sent to the address below: 

Commodity Futures Trading Commission 

Division of Enforcement 

ATTN: Accounts Receivables--- AMZ 340 

E-mail Box: 9-AMC-AMZ-AR-CFTC 

DOT IF AA/MMAC 

6500 S. MacArthur Blvd. 

Oklahoma City, OK 73169 

Telephone: ( 405) 954-5644 

If payment is to be made by electronic funds transfer, Respondents shall contact Linda 

Zurhorst or her successor at the above address to receive payment instructions and shall 

fully comply with those instructions. Respondents shall accompany payment of the CMP 

Obligation with a cover letter that identifies the paying Respondents and the name and 

docket number of this proceeding. The paying Respondents shall simultaneously 

transmit copies of the cover letter and the form of payment to the Chief Financial Officer, 

Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, NW, 

Washington, D.C. 20581. 

C. Respondents and their successors and assigns shall comply with the following conditions 

and undertakings set forth in the Offer: 

1. PRINCIPLES23 

1. RBS agrees to undertake the following: (1) to ensure the integrity and 

reliability of its Benchmark Interest Rate Submission(s), presently and in 

23 The following terms are defined as follows: 

Benchmark Interest Rate: An interest rate for a currency and maturity/tenor that is calculated 

based on data received from market participants and published to the market on a regular, 

periodic basis, such as LIBOR and Euribor; 

Benchmark Publisher: A banking association or other entity that is responsible for or oversees 

the calculation and publication of a Benchmark Interest Rate; 

Submission(s): The interest rate(s) submitted for each currency and maturity/tenor to a 

Benchmark Publisher. For example, ifRBS submits a rate for one month and three month U.S. 

Dollar LIBOR, that would constitute two Submissions; 

Submitter(s): The person(s) responsible for determining and/or transmitting the Submission(s); 

and 

Supervisor(s): The person(s) immediately and directly responsible for supervising any pmtion of 

the process ofSubmission(s) and/or ahy ofthe Submitter(s). 

40 
the future; and (2) to identify, construct and promote effective 

methodologies and processes of setting Benchmark Interest Rates, in 

coordination with efforts by Benchmark Publishers, in order to ensure the 

integrity and reliability of Benchmark Interest Rates in the future. 

11. RBS represents and undertakes that each Benchmark Interest Rate 

Submission by RBS shall be based upon a rigorous and honest assessment 

of information, and shall not be influenced by internal or external conflicts 

of interest, or other factors or information extraneous to any rules 

applicable to the setting of a Benchmark Interest Rate. 

2. INTEGRITY AND RELIABILITY OF BENCHMARK INTEREST RATE 

SUBMISSIONS 

1. DETERMINATION OF SUBMISSIONS: RBS shall determine its 

Submission(s) based on the following Factors, Adjustments and 

Considerations, unless otherwise prohibited by or contrary to an 

affirmative obligation imposed by any law or regulation, or the rules or 

definitions issued by a Benchmark Publisher. RBS's transactions shall be 

given the greatest weight in determining its Submissions, subject to 

applying appropriate Adjustments and Considerations in order to reflect 

the market measured by the Benchmark Interest Rate. 24 . 

RBS shall determine its Submissions as described in these Undertakings 

within fourteen (14) days of the entry ofthis Order. 

Ill Factor 1-RBS's Borrowing or Lending Trans~9tions Observed 

by RBS's Submitters: 

a. RBS's transactions in the market as defined by the 

Benchmark Publisher for the particular Benchmark Interest 

Rate; 

b. RBS's transactions in other markets for unsecured funds, 

including, but not limited to, certificates of deposit and 

issuances of commercial paper; and 

c. RBS's transactions in various related markets, including, 

but not limited to, Overnight Index Swaps, foreign currency 

forwards, repurchase agreements, futures, and Fed Funds. 

24 The rules used by Benchmark Publishers to determine Benchmark Interest Rates vary, may not be 

consistent with each other, and provide different levels of guidance as to how to make Submissions. 

41 
11 Factor 2- Third Party Transactions Observed by RBS's 

Submitters: 

a. Transactions in the market as defined by the Benchmark 

Interest Rate relevant to each of the Submission(s); 

b. Transactions in other markets for unsecured funds, 

including, but not limited to, cetiificates of deposit and 

issuances of commercial paper; and 

c. Transactions in various related markets, including, but not 

· limited to, Overnight Index Swaps, foreign currency 

forwards, repurchase agreements, futures, and Fed Funds. 

11 Factor 3- Third Party Offers Observed by RBS's Submitters: 

a. Third party offers to RBS in the market as defined by the 

Benchmark Publisher relevant to each of the 

Submission(s); 

b. Third party offers in other markets for unsecured funds, 

including, but not limited to, cetiificates of deposit and 

issuances of commercial paper, provided to RBS by 

interdealer brokers (e.g., voice brokers); and 

c. Third pmiy offers provided to RBS in various related 

markets, including, but not limited to, Overnight Index 

Swaps, foreign currency forwards, repurchase agreements, 

and Fed Funds. 

11 Adjustments and Considerations: All ofthe following 

Adjustments and Considerations may be applied with respect to 

each ofthe Factors above: 

a. Time: With respect to the Factors considered above, 

proximity in time to the Submission(s) increases the 

relevance of that Factor; 

b. Market Events: RBS may adjust its Submission(s) based 

upon market events, including price variations in related 

markets, that occur prior to the time at which the 

Submission(s) must be made to the Benchmark Publisher. 

That adjustment shall reflect measurable effects on 

transacted rates, offers or bids; 

c. Term Structure: As RBS applies the above Factors, if RBS 

has data for any maturity/tenor described by a Factor, then 

42 
RBS may interpolate or extrapolate the remaining 

maturities/tenors from the available data; 

d. Credit Standards: As RBS applies the above Factors, 

adjustments may be made to reflect RBS's credit standing 

and/or the credit spread between the market as defined by 

the Benchmark Publisher and transactions or offers in the 

related markets used in the Factors above. Additionally, 

RBS may take into account counterparties' credit standings, 

access to funds, and borrowing or lending requirements, 

and third party offers considered in connection with the 

above Factors; and 

e. Non-representative Transactions: To the extent a 

transaction included among the Factors above significantly 

diverges in an objective manner from other transactions, 

and that divergence is not due to market events as 

addressed above, RBS may exclude such transactions from 

its determination of its Submission(s). 

ii. SUPERVISOR(S) REVIEW: Effective within fourteen (14) days of the 

entry of this Order, each daily Submission shall be reviewed by a 

Supervisor on a daily basis after the Submission(s) are made to the 

Benchmark Publisher. 25 

111. QUALIFICATIONS OF SUBMITTER(S) AND SUPERVISOR(S): All 

Submitter(s) shall have significant experience in the markets for the 

Benchmark Interest Rate to which they are submitting or a comparable 

market, but may designate less experienced parties, who routinely work 

under their supervision, to make Submission(s) during limited periods of 

absence. All Supervisors shall have significant experience in the markets 

for the relevant Benchmark Interest Rate or a comparable market. 

Submitters, Supervisors and any parties designated to make Submission(s) 

when the Submitter(s) are absent shall not be assigned to any derivatives 

trading desk, unit or division within RBS, or participate in derivatives 

trading other than that associated with RBS's liquidity and liability 

management. The compensation of Submitter(s) and Supervisor(s) also 

shall not be directly based upon derivatives trading, other than that 

associated with RBS's liquidity and liability management. 

25 Insofar as this Section 2 of the Undertakings entitled "INTEGRITY AND RELIABILITY OF 

BENCHMARK INTEREST RATE SUBMISSIONS" applies to RBS offices in Russia, Romania and 

Indonesia, RBS shall have until October 25, 2013 to implement the provisions of this section with respect 

to those three offices; provided, however, for those offices, RBS must comply with Section 2(i) above and 

make its Submissions in accordance with the Factors, Adjustments and Considerations identified above 

within 14 days of the entry of the Order. 

43 
1v. FIREWALLS: INTERNAL CONTROLS REGARDING IMPROPER 

COMMUNICATIONS AND SUBMISSIONS: RBS shall implement 

internal controls and procedures to prevent improper communications with 

Submitter(s) and Supervisor(s) regarding Submission(s) or prospective 

Submission(s) to ensure the integrity and reliability of its Submission(s). 

Such internal controls and procedures shall include, but not be limited to: 

111 The "firewalls" contemplated herein will be implemented through 

written policies and procedures that delineate proper and improper 

communications with Submitter(s) and Supervisor(s), whether 

internal or external to RBS. For these purposes, improper 

communications shall be any attempt to influence RBS's 

Submission(s) for the benefit of any derivatives trading position 

(whether ofRBS or any third party) or any attempt to cause RBS's 

Submitter(s) to violate any applicable Benchmark Publisher's rules 

or definitions, or Section 2 of these Undertakings; and 

11 A requirement that the Submitter(s) shall not be located in close 

proximity to traders who primarily deal in derivatives products that 

reference a Benchmark Interest Rate to which RBS contributes any 

Submission(s). The two groups should be separated such that 

neither can hear the other. 

v. DOCUMENTATION: RBS shall provide the documents set forth below 

promptly and directly to the Commission upon request, without subpoena 

or other process, regardless of whether the records are held outside of the 

United States, to the extent permitted by law. 

11 For each Submission, RBS shall contemporaneously memorialize, 

and retain in an easily accessible format for a period of five (5) 

years after the date of each Submission, the following information: 

a. The Factors, Adjustments and Considerations described in 

Section 2(i) above that RBS used to determine its 

Submission(s), including, but not limited to, identifying any 

non-representative transactions excluded from the 

determination ofthe Submission(s) and the basis for such 

exclusions, as well as identifying all transactions given the 

greatest weight or considered to be the most relevant, and 

the basis for such conclusion; 

b. All models or other methods used in determining RBS's 

Submission(s), such as models for credit standards and/or 

term structure, and any adjustments made to the 

Submission(s) based on such models or other methods; 

44 
II 

c. Relevant data and information received from interdealer 

brokers used in connection with determining RBS's 

Submission(s) including, but not limited to, the following: 

• Identification of the specific offers and bids relied 

upon by RBS when determining each Submission; 

and 

• The name of each company and person from whom 

the information or data is obtained; 

d. RBS's assessment of"reasonable market size" for its 

Submission(s) (or any other such criteria for the relevancy 

of transactions to a Benchmark Interest Rate), to the extent 

that the rules for a Benchmark Interest Rate require that 

pertinent transactions considered in connection with 

Submission( s) be of "reasonable market size" (or any other 

such criteria); 

e. Information regarding market events considered by RBS in 

connection with determining its Submission(s), including, 

without limitation, the following: 

• The specific market announcement(s) or event(s); 

and 

• Any effect of such market event(s) on transacted 

rates, offers or bids in the relevant markets; and 

f. The identity of the Submitter(s) who made, and the 

Supervisor(s) who reviewed, the Submission(s). 

For each Submission, RBS shall retain for a period of five (5) 

years after the date of each Submission, the following transactional 

data used by RBS to determine its Submission(s); the data shall be 

easily accessible and convertible into the Microsoft Excel file 

format; the data shall include, without limitation, the following to 

the extent known to RBS at the time of the Submission(s): 

a. Instrument; 

b. Maturity/tenor; 

c. Trade type (i.e., loan/deposit, placing/taking); 

d. Buy/sell indicator; 

e. Transaction date (in mmddyyyy format); 

f. Maturity date (in mmddyyyy format); 

g. Value date (in mmddyyyy format); 

h. Loan effective date; 

45 
1. Customer number; 

j. Currency; 

k. Ticket ID; 

1. Timestamp; 

m. Counterparty A (buyer/bidder); 

n. Counterparty B (seller/offeror); 

o. Nominal/notional size of the transaction; 

p. Interest basis (360/365 day year); 

q. The fixed interest rate; and 

r. Any special or additional terms (e.g., a repurchase 

agreement or some form of "non-vanilla agreement"). 

111 Transaction Records: RBS shall retain for a period of five (5) 

years trade transaction records and daily position and risk reports, 

including (without limitation) monthly and quarterly position and 

risk reports, related to the trading activities of Submitter(s) and 

traders who primarily deal in derivatives products that reference a 

Benchmark Interest Rate; the records and reports shall be easily 

accessible and convertible into the Microsoft Excel file format. 

• Requirement To Record Communications: RBS shall record and 

retain to the greatest extent practicable all of the following 

communications: 

a. All communications concerning the determination and 

review of the Submission(s); and 

b. All communications of traders who primarily deal in 

derivatives products that reference a Benchmark Interest 

Rate concerning trades, transactions, prices, or trading 

strategies pertaining to any derivative that references any 

Benchmark Interest Rate (or the supervision thereof). 

The above communications shall not be conducted in a manner to 

prevent RBS from recording such communications; 

Audio communications of Submitters and Supervisors shall be 

retained for a period of one (1) year. Audio communications of 

traders who primarily deal in derivatives products that reference a 

Benchmark Interest Rate, and who are located in the London, 

Tokyo, Singapore, and Connecticut offices ofRBS, shall be 

retained for a period of six (6) months. Subject to a reasonable 

time to implement, RBS's audio retention requirements pursuant to 

these Undertakings shall commence within a reasonable period 

after the entry of this Order and shall continue for a period of five 

(5) years thereafter; 

46 
All communications except audio communications shall be 

retained for a period of five (5) years; 26 and 

Nothing in these Undertakings shall limit, restrict or narrow any 

obligations pursuant to the Act or the Commission's Regulations 

promulgated thereunder, including but not limited to Regulations 

1.31 and 1.35, 17 C.F.R. §§ 1.31 and 1.35 (2012), in effect now or 

in the future. 

v1. MONITORING AND AUDITING: 

11 Monitoring: RBS shall maintain or develop monitoring systems or 

electronic exception reporting systems that identify possible 

improper or unsubstantiated Submissions. Such reports will be 

reviewed on at least a weekly basis and if there is any significant 

deviation or issues, the underlying documentation for the 

Submission shall be reviewed to determine whether the 

Submission is adequately substantiated. If it is not substantiated, 

RBS shall notify its chief compliance officer(s) and the Benchmark 

Publisher; 

11 Periodic Audits: Starting six (6) months from the date ofthe entry 

of this Order, and continuing every six (6) months thereafter, 

unless an annual audit is scheduled at the same time, RBS shall 

conduct internal audits of reasonable, random samples of its 

Submission(s), the factors and all other evidence documenting the 

basis for such Submission(s), and communications of the 

Submitter(s) in order to verify the integrity and reliability of the 

process for determining Submission(s); and 

11 Annual Audits By Third Party Auditors: Starting one (1) year 

from the date ofthe entry ofthis Order, and continuing annually 

for four (4) additional years thereafter, RBS shall retain an 

independent, third-party auditor to conduct an audit of its 

Submission(s) and the process for determining Submission(s), 

which shall include, without limitation, the following: 

26 RBS also shall improve its current and future proprietary messaging systems within six (6) months of 

the entry of this Order. To ensure the prompt searching and retrieval of such internal messages, RBS 

shall retain all such messages in a form that identifies clearly the following information: a unique 

identifying code for each such internal communication such that it can be retrieved and referenced; 

specific identification of each patiicipant in such a communication; with respect to a communication that 

takes the form of a chat room with three or more patiicipants, the date and time (including applicable time 

zone) that each person joined and left that chat room; and the text of each message within each 

communication, including a date and time stamp for each message within a communication (including the 

applicable time zone). 

47 
a. Reviewing communications of Submitter(s) and 

Supervisor( s ); 

b. Interviewing the Submitter(s) and Supervisor(s), to the 

extent they are still employed by RBS; 

c. Obtaining written verification from the Submitter(s) and 

Supervisor(s), to the extent they are still employed by RBS, 

that the Submission(s) were consistent with this Order, the 

policies and procedures in place for making RBS's 

Submission(s ), and the definitions applicable to the 

Benchmark Interest Rate for which RBS made 

Submission(s ); and 

d. A written audit report to be provided to RBS and the 

Commission (with copies addressed to the Commission's 

Division of Enforcement (the "Division")). 

v11. POLICIES, PROCEDURES AND CONTROLS: Within sixty (60) days 

of the entry of this Order, RBS shall develop policies, procedures and 

controls to comply with each of the specific Undertakings set forth above 

with the goal of ensuring the integrity and reliability of its Submission(s). 

In addition, RBS shall develop policies, procedures and controls to ensure 

the following: 

11 The supervision of the Submission process; 

11 That any violations of the Undertakings or any questionable, 

unusual or unlawful activity concerning RBS's Submissions are 

reported to and investigated by RBS 's compliance or legal 

personnel and reported, as necessary, to authorities and the 

Benchmark Publishers; 

11 The periodic but routine review of electronic communications and 

audio recordings of or relating to the Submission Process; 

• Not less than monthly, the periodic physical presence of 

compliance personnel on the trading floors of the Submitter(s) 

and/or traders who primarily deal in derivatives products that 

reference a Benchmark Interest Rate in connection with these 

Policies, Procedures and Controls; 

11 The handling of complaints concerning the accuracy or integrity of 

RBS's Submission(s) including: 

a. Memorializing all such complaints; 

48 
b. Review and follow-up by the chief compliance officer(s) or 

his designee of such complaints; and 

11 The reporting of material complaints to the Chief Executive 

Officer and Board of Directors, relevant self-regulatory 

organizations, the relevant Benchmark Publisher, the Commission, 

and/or other appropriate regulators. 

vn1. TRAINING: RBS shall develop training programs for all employees who 

are involved in its Submission(s), including, without limitation, Submitters 

and Supervisors, and all traders who primarily deal in derivatives products 

that reference a Benchmark Interest Rate. Submitters and Supervisors 

shall be provided with preliminary training regarding the policies, and 

procedures and controls developed pursuant to Section 2(vii) of these 

Undertakings. By no later than October 25, 2013, all Submitters, 

Supervisors, and traders who primarily deal in derivatives products that 

reference a Benchmark Interest Rate shall be fully trained in the 

application of these Undertakings to them, as set forth herein. Thereafter, 

such training will be provided promptly to employees newly assigned to 

any of the above listed responsibilities, and again to all Submitters, 

Supervisors and traders who primarily deal in derivatives products that 

reference a Benchmark Interest Rate as part of RBS 's regular training 

programs. The training shall be based upon the individual's position and 

responsibilities, and as appropriate, address the following topics: 

11 The Undertakings set forth herein; 

11 The process of making Submission(s); 

11 The impropriety of attempting to influence the determination of 

RBS's Submission(s); 

11 The requirement to conduct all business related to RBS's 

Submission(s) on RBS's recorded telephone and electronic 

communications systems, and not on personal telephones or other 

electronic devices, as set forth in Section 2(v) of these 

U ndetiakings; 

11 The requirement to conduct certain business related to derivatives 

products that reference a Benchmark Interest Rate on RBS's 

recorded telephone and electronic communications systems, and 

not on personal devices or systems, as set forth in Section 2(v) of 

these Undertakings; 

• The policies and procedures developed and instituted pursuant to 

these Undertakings; and 

49 
11 The employment and other potential consequences if employees 

act unlawfully or improperly in connection with RBS's 

Submission(s) or process for determining Submission(s). 

1x. REPORTS TO THE COMMISSION: 

11 Compliance with Undertakings: Every four ( 4) months, starting 

120 days from the entry of this Order, RBS shall make interim 

repmis to the Commission, through the Division, explaining its 

progress towards compliance with the Undertakings set fmih 

herein. Within 365 days of the entry of this Order, RBS shall 

submit a report to the Commission, through the Division, 

explaining how it has complied with the Undertakings set forth 

herein. The report shall attach copies of and describe the internal 

controls, policies and procedures that have been designed and 

implemented to satisfy the Undetiakings. The report shall contain 

a certification from a representative ofRBS's Executive 

Management, after consultation with RBS's chief compliance 

officer(s), that RBS has complied with the Undertakings set forth 

above, and that it has established policies, procedures and controls 

to satisfy the Undertakings set forth in this Order; 

11 Submitter(s), Supervisor(s), and Heads of Appropriate Trading 

Desks: Within fourteen (14) days of the entry of this Order, or as 

soon as practicable thereafter, RBS shall provide, meet with and 

explain these Undertakings to all Submitters, Supervisors and the 

head of each trading desk that primarily deals in derivatives that 

reference a Benchmark Interest Rate. Within that same time 

frame, RBS shall provide to the Commission, through the Division, 

written or electronic affirmations signed by each Submitter, 

Supervisor, and head of each trading desk that primarily deals in 

derivatives that reference a Benchmark Interest Rate, stating that 

he or she has received and read the Order and Undetiakings herein, 

and that he or she understands these Undertakings to be effective 

immediately; and 

• Disciplinary and Other Actions: RBS shall promptly report to the 

Commission, through the Division, all improper conduct related to 

any Submission(s) or the attempted manipulation or manipulation 

of a Benchmark Interest Rate, as well as any disciplinary action, or 

other law enforcement or regulatory action related thereto, unless 

de minimis or otherwise prohibited by applicable laws or 

regulations. 

50 
3. DEVELOPMENT OF RIGOROUS STANDARDS FOR BENCHMARK 

INTEREST RATES 

To the extent RBS is or remains a contributor to any Benchmark Interest Rate, 

RBS agrees to make its best efforts to participate in efforts by current and future 

Benchmark Publishers, other price reporting entities and/or regulators to ensure 

the reliability of Benchmark Interest Rates, and through its participation to 

encourage the following: 

1. METHODOLOGY: Creating rigorous methodologies for the contributing 

panel members to formulate their Submissions. The aim of such 

methodologies should be to result in a Benchmark Interest Rate that 

accurately reflects the rates at which transactions are occUlTing in the 

market being measured by that Benchmark Interest Rate; 

11. VERIFICATION: Enforcing the use of those methodologies through an 

effective regime of documentation, monitoring, supervision and auditing, 

required by and performed by the Benchmark Publishers, and by the 

contributing panel members internally; 

111. INVESTIGATION: Facilitating the reporting of complaints and concerns 

regarding the accuracy or integrity of Submissions to Benchmark Interest 

Rates or the published Benchmark Interest Rate, and investigating those 

complaints and concerns thoroughly; 

iv. DISCIPLINE: Taking appropriate action if, following a thorough 

confidential investigation, the Benchmark Publisher determines that a 

complaint or concern regarding the accuracy or integrity of a Submission 

or the published Benchmark Interest Rate has been substantiated; 

v. TRANSPARENCY: Making regular repmis to the public and the markets 

of facts relevant to the integrity and reliability of each Benchmark Interest 

Rate. Such reports should include, but not be limited to, the following: 

11 At the time each Benchmark Interest Rate is published, the 

Benchmark Publisher should display prominently whether each 

rate is based entirely on transactions in the market the rate is 

supposed to reflect, or whether it instead is based, in whole or in 

part, on other data or information; 

11 The Benchmark Publisher also should make periodic reports 

regarding the number and nature of complaints and concerns 

received regarding the accuracy or integrity of Submissions or the 

published Benchmark Interest Rate while maintaining the 

anonymity of all those who have repmied or are the subject of 

complaints and concerns; 

51 
11 The Benchmark Publisher should additionally make periodic 

reports regarding the results of all investigations into such 

complaints and concerns while maintaining the anonymity of all 

those involved in investigations that have not yet been completed; 

and 

Vl. FORMULATION: Periodically examining whether each Benchmark 

Interest Rate accurately reflects the rate at which transactions are 

occuning in the market being measured (using the statistical method 

prescribed by that Benchmark Interest Rate), and evaluating whether the 

definition and instructions should be revised, or the composition of the 

panel changed; 

Such examinations should include a rigorous mathematical comparison of 

transactions in the relevant market with the published Benchmark Interest 

Rate on the same day over a specified period, and a determination of 

whether any differences are statistically or commercially significant. 

RBS shall repmi periodically, on at least a quarterly basis, to the Commission, 

through the Division, either orally or in writing, on its patiicipation in such 

efforts, to the extent that such reporting is not otherwise prohibited by law or 

regulations, by the rules issued by Benchmark Publishers, or by nondisclosure 

agreements by and between RBS and Benchmark Publishers. 

4. COOPERATION WITH THE COMMISSION 

1. Respondents shall cooperate fully and expeditiously with the Commission, 

including the Division, and any other governmental agency in this action, 

and in any investigation, civil litigation, or administrative matter related to 

the subject matter of this action or any current or future Commission 

investigation related thereto. As part of such cooperation, Respondents 

agree to the following for a period of five (5) years from the date of the 

entry of this Order, or until all related investigations and litigation are 

concluded, including through the appellate review process, whichever 

period is longer: 

11 Preserve all records relating to the subject matter of this 

proceeding, including, but not limited to, audio files, electronic 

mail, other documented communications, and trading records; 

11 Comply fully, promptly, completely, and truthfully with all 

inquiries and requests for information or documents; 

• Ptovide authentication of documents and other evidentiary 

material; 

52 
11 Provide copies of documents within RBS 's possession, custody or . 

control; 

• Subject to applicable laws and regulations, RBS will make its best 

efforts to produce any current (as of the time of the request) 

officer, director, employee, or agent ofRBS, regardless ofthe 

individual's location, and at such location that minimizes 

Commission travel expenditures, to provide assistance at any trial, 

proceeding, or Commission investigation related to the subject 

matter of this proceeding, including, but not limited to, requests for 

testimony, depositions, and/or interviews, and to encourage them 

to testify completely and truthfully in any such proceeding, trial, or 

investigation; and 

11 Subject to applicable laws and regulations, RBS will make its best 

efforts to assist in locating and contacting any prior (as of the time 

ofthe request) officer, director, employee or agent ofRBS; 

11. RBS also agrees that it will not undertake any act that would limit its 

ability to cooperate fully with the Commission. RBS will designate an 

agent located in the United States of America to receive all requests for 

information pursuant to these Undertakings, and shall provide notice 

regarding the identity of such Agent to the Division upon entry of this 

Order. Should RBS seek to change the designated agent to receive such 

requests, notice of such intention shall be given to the Division fomieen 

(14) days before it occurs. Any person designated to receive such request 

shall be located in the United States of America; and 

111. RBS and the Commission agree that nothing in these Undertakings shall 

be construed so as to compel RBS to continue to contribute Submission(s) 

related to any Benchmark Interest Rate. Without prior consultation with 

the Commission, RBS remains free to withdraw from the panel of 

contributors to any Benchmark Interest Rate. 

5. PROHIBITED OR CONFLICTING UNDERTAKINGS 

Should the Undertakings herein be prohibited by, or be contrary to the provisions 

of any obligations imposed on RBS by any presently existing, or hereinafter 

enacted or promulgated laws, regulations, regulatory mandates, or the rules or 

definitions issued by a Benchmark Publisher, then RBS shall promptly transmit 

notice to the Commission (through the Division) of such prohibition or conflict, 

and shall meet and confer in good faith with the Commission (through the 

Division) to reach an agreement regarding possible modifications to the 

Unde1iakings herein sufficient to resolve such inconsistent obligations. In the 

interim, RBS will abide by the obligations imposed by the law, regulations, 

regulatory mandates and Benchmark Publishers' rules and definitions. Nothing in 

53 
these Undertakings shall limit, restrict or narrow any obligations pursuant to the 

Act or the Commission's Regulations promulgated thereunder, including but not 

limited to Regulations 1.31 and 1.35, 17 C.F.R. §§ 1.31 and 1.35 (2012), in effect 

now or in the future. 

6. PUBLIC STATEMENTS 

Respondents agree that neither they nor any of their successors and assigns, 

agents or employees under their authority or control shall take any action or make 

any public statement denying, directly or indirectly, any findings or conclusions 

in this Order or creating, or tending to create, the impression that this Order is 

without a factual basis; provided, however, that nothing in this provision shall 

affect Respondents' (i) testimonial obligations, or (ii) right to take legal positions 

in other proceedings to which the Commission is not a pmiy. Respondents and 

their successors and assigns shall undertake all steps necessary to ensure that all 

of their agents and/or employees under their authority or control understand and 

comply with this agreement. 

D. Partial Satisfaction: Respondents understand and agree that any acceptance by the 

Commission of partial payment ofRespondents' CMP Obligation shall not be deemed a 

waiver of their obligation to make further payments pursuant to this Order, or a waiver of 

the Commission's right to seek to compel payment of any remaining balance. 

The provisions of this Order shall be effective as of this date. 

By the Commission. 

elissa Jurgens 

Secretary of the Commissi 

Commodity Futures Trading Commission 

Dated: February 6, 2013 

54