Christian Bittar, 46, the former star trader of Deutsche Bank AG has been pleaded guilty to conspiring to manipulate the Euribor benchmark rates between the period 2005 to 2009. Initially charged by Britain’s Serious Fraud Office (SFO) in November 2015, Bittar confessed to the Euribor rigging allegations earlier this month. Bittar was pleaded guilty on March 2nd, but due to the restrictions put on by London court, his plea couldn’t be reported until court lifted those restrictions.
The Euribor rigging scandal was one of the UK’s biggest banking scandal. Euribor is the euro interbank offered rate and is the Brussels-based similar to London-based Libor. The scandal first wired out in the wake of the financial meltdown in 2008 when US and UK regulator commenced crackdown on growing nature of suspicious nature of trading activities. And, since the global investigation of rate rigging was sparked, financial institutions have paid $9 billion in penalties to settle regulatory allegations including the Deutsche Bank’s $2.5 billion penalties.
The incidences marked the dramatic fall of Christian Bittar, one of the Deutsche’s most profitable rates traders ever, and rumoured to have contributed over €2bn in audited profits for the bank over the five year period. In the trade circle, Bittar was known as Mr Basis Point because of his preference to make trades on small changes in the short-term interest rates. His bet was mostly on three and six months instruments, that he believed would rise more quickly than one-month rates, something that paid-off at the wake of global financial crisis.
Before the scandal broke out, Bittar was taking home 10 percent of the companies trading profits as bonuses. According to Bloomberg reports, Bittar alone took more than $US120m in bonuses from his profitable bets for the company in 2008. In the due course of investigations by US and UK regulators, Bittar was fired by Deutsche in December 2011 and tried to distance itself from rate-rigging allegations.
Expanding its investigations, regulators shifted its investigation process from banks to individual traders. Bittar received a civil penalty in 2014, including ban from the financial industry and penalty of €10 million by FCA. Bittar also lost €50 million of his unvested stock options on his termination from the bank.
Total 30 individuals were charged by SFO on the rate-rigging scandal and Bittar will be the fifth former trader in this six long years of the investigation process, will be prosecuted by SFO. Bittar is currently lodged in jail and his sentencing will be complete after the related trials resume from April 9th.