AN EU MODEL FOR OTHER JURISDICTIONS? SEVEN

mlex
Report
PR E D I C T I V E A N A L Y S I S O F R E G U L A T O R Y RI S K
BENCHMARKS
AN EU MODEL FOR OTHER JURISDICTIONS?
SEVEN LEADERS TEST THEIR LIMITS
BENCHMARKS IN NUMBERS: 21 CASES AND COUNTING
With contributions from EU Parliament’s Cora Van Nieuwenhuizen,
US CME’s Julie Winkler and UK FCA’s Martin Wheatley
Spring 2015
$195.00
IN S IG H T COMMENTARY
ANALYSIS
mlex
Benchmarks Spring 2015
BENCHMARKS
Contents
Index Law firms, regulators and courts.
PAGE 03
Executive Briefing
The rate-rigging battle has brought together some of the most divided global regulators,
says MLex’s Juliane von Reppert-Bismarck.
PAGE 04
EU Expert View
“A model for other jurisdictions”: EU lawmaker Cora Van Nieuwenhuizen sets out Europe’s
three-pronged approach to benchmark regulation.
PAGE 06
US Expert View Calling for equivalence: Misaligned benchmark rules risk sparking confusion, warns the
CME’s Julie Winkler.
PAGE 08
UK Expert View Industry deterrents: banks must strip rate-rigging of its profit incentive, says the UK FCA’s
Martin Wheatley.
PAGE 10
Data Mining material from its extensive archives, MLex presents the numbers behind the benchmark scandal. With data
and full details of 21 legal cases.
PAGE 12
Spotlight
More than half a decade after the first stirrings of the scandal surrounding Libor, concerns over the integrity
of the benchmark and other key financial rates show no signs of abating. MLex’s Richard Vanderford reports.
PAGE 38
Profiles of Note
Introducing the seven men and women leading the benchmark debate from the UK, US and EU:
Naomi R. Buchwald, George B. Daniels, Timothy Massad, Emily O’Reilly, Cora Van Nieuwenhuizen, Margrethe Vestager
and Martin Wheatley.
PAGE 40
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MLex Report | 02
Benchmarks Spring 2015
Index
Hagens Berman Sobol Shapiro
Scott & Scott
Hausfeld
Seward & Kissel
Heenan Blaikie
Shapiro Haber & Urmy
Heins Mills & Olson
Shearman & Sterling
Hogan Lovells
Shepherd Finkelman Miller & Shah
Hughes Hubbard & Reed
Sidley Austin
Joseph Saveri Law Firm
Simpson Thacher & Bartlett
Kaplan Fox & Kilsheimer
Skadden, Arps, Slate, Meagher & Flom
Katten Muchin Rosenman
Slaughter and May
Kellogg Huber Hansen Todd Evans &
South Square
Figel
Stroock & Stroock & Lavan
King & Wood Mallesons
Sullivan & Cromwell
Kirby McInerney
Susman Godfrey
Latham & Watkins
The Wilkes Partnership
Law Offices of Matthew l. Levine
Three Verulam Buildings
Lieff Cabraser Heimann & Bernstein
Veil Jourde
Linklaters
Vinson & Elkins
Lite Depalma Greenberg
Brown Rudnick
W. Michael G. Osborne
Locke Lord
Cadwalader Wickersham & Taft
Wachtell, Lipton, Rosen & Katz
Lovell Stewart Halebian Jacobson
Cafferty Clobes Meriwether & Sprengel
Weinstein Kitchenoff & Asher
Lowey Dannenberg Cohen & Hart
Cahill Gordon & Reindel
White & Case
Mayer Brown
Cleary Gottlieb Steen & Hamilton
Wiggin and Dana
McDermott Will & Emery
Clifford Chance
Wilmer Cutler Pickering Hale and Dorr
Milbank Tweed Hadley & McCloy
Winston & Strawn
Cooke Young & Keidan
Mithoff Law Firm
Cotchett Pitre & McCarthy
Morgan & Morgan
Covington & Burling
Morgan Lewis & Bockius
Davis Polk & Wardwell
Morris & Morris
Regulators and courts
mentioned in this report:
De Brauw Blackstone Westbroek
Motley Rice
European Ombudsman’s Office
Debevoise & Plimpton
Norton Rose
European Commission
Dickstein Shapiro
O’Neil Cannon Hollman DeJong & Laing
UK Financial Conduct Authority
Douglas M. Chalmers P.C.
O’Melveny & Myers
UK High Court
Edelman, Combs, Latturner & Goodwin
One Essex Court
Swiss Competition Commission
Eimer Stahl Klevorn & Solberg
Osler Hoskin & Harcourt
Swiss Financial Market Supervisory
Eng & Nishimura
Outer Temple
Authority
Fenet Law Firm
Patterson Belknap Webb & Tyler
EFTA Surveillance Authority
Flemming Zulack Williamson Zauderer
Paul Hastings
Norwegian Competition Authority
Freed Kanner London & Millen
Paul Weiss Rifkind Wharton & Garrison
US Federal Trade Commission
Freshfields Bruckhaus Deringer
Perkins Coie
US Commodity Futures Trading
Friedman Kaplan Seiler & Adelman
Pillsbury Winthrop Shaw Pittman
Commission
Gibson Dunn & Crutcher
Pinsent Masons
US Department of Justice
Glancy Binkow & Goldberg
Pomerantz
US Federal Reserve
Goldstein & Russell
Quinn Emanuel Urquhart & Sullivan
Northern District of California
Goodwin Procter
Richards Kibbe & Orbe
Southern District of New York
Gordon, Muir & Foley
Robbins Geller Rudman & Dowd
US Supreme Court
Grant & Eisenhofer
Robins Kaplan Miller & Ciresi
Ontario Superior Court of Justice
Guildhall Chambers
Schiff Hardin
Hong Kong Monetary Authority
Law firms mentioned
in this report:
Abraham, Fruchter & Twersky
Akin Gump Strauss Hauer & Feld
Allen & Overy
Arnold & Porter
Baker & McKenzie
Baron & Budd
Berger & Montague
Bernstein Litowitz Berger &
Grossmann
Bingham McCutchen
Block & Leviton
Boies Schiller & Flexner
Boni & Zack
Bradley Arant Boult Cummings
Brick Court Chambers
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MLex Report | 03
mlex EXECUTIVE BRIEFING
Executive briefing
Award-winning journalist and editor
Juliane von Reppert-Bismarck writes
about major regulatory trends in the
EU, US, China and other jurisdictions.
She led MLex’s global expansion of
trade and investment coverage.
While Deutsche Bank’s record
$2.5 billion penalty to settle raterigging allegations in April has
dominated the talk of global
regulators and the twittersphere,
UK Prime Minister (at time of
writing) David Cameron has
taken a different tack.
Along with financial centers
around the world, the reputation
of the City of London as a
reliable market mirror has been
wounded severely.
It is not just the new
knowledge of crisis-ridden banks
rigging inter-bank lending rates
to deflect concerns about the
cost of borrowing; or the billioneuro, billion-dollar, billion-yen
positions that bankers took
on interest-rate moves at vast
profit. The world is now all too
embarrassingly familiar with the
lurid argot of London traders as
they busily fix benchmark rates
of any description.
Cameron took these proverbial
lemons and made them into
a refreshing drink. The $344
million fine that the Financial
Conduct Authority extracted
from Deutsche Bank, he said,
will fund apprenticeships for
unemployed young Brits. The
fine has come as a handy windfall
for the government.
Indeed, even beyond 10
Downing Street there is some
cause to celebrate the dozens of
cases that have spluttered into
life since 2011 in seven different
jurisdictions from the US and
Canada to the UK and Hong
Kong. As they’ve battled raterigging of the Libor, Euribor,
Tibor, foreign-exchange rates
and countless commodities,
regulators and enforcement
agencies
have
collaborated
with one another and across
national jurisdictions. That
may be accepted practice in
the global antitrust community.
Among financial authorities
long notorious for their mutual
distrust, it is still a rare thing.
Thus, unusually, the UK, US
and Switzerland jointly extracted
a $1.5 billion payment from
UBS in 2012. One year later,
Benchmarks IssueMLex Report | 04
mlex EXECUTIVE BRIEFING
mlex REPORT
Editor & publisher
Robert McLeod
Special contributors
Cora Van Nieuwenhuizen
Martin Wheatley
Julie Winkler
Editor
Juliane von Reppert-Bismarck
Production editor
Steve Hillyard
Editorial assistant
Catriona Kay
Editorial research
Karoline Soldon
Mario Hilgenfeld
Andrew Boyce
iStockphoto
MLex contributors
Leah Nylen
John Rega
Neil Roland
Richard Vanderford
the UK and US rounded on broker
ICAP. Most recently, the US and UK
swooped down on Deutsche Bank
to secure the record $2.5 billion
payment.
With more than 20 administrative
and legal proceedings according to
MLex’s count, the question remains
whether the vast state of rate-rigging
can trigger simple, reliable and global
regulation.
I hope that this selection of our
proprietary data from the cases,
and insights from three important
contributors to the benchmark
debate, will be useful for you.
© MLex Ltd.
141 Moorgate, London EC2M 6TX
Tel. (44) 203 402 7000
VAT no. GB 867 4468 73
MLex sprl
Rue de la Loi 67,
Brussels 1040, Belgium
VAT no. BE 0891 891 244
The views expressed by our contributors
are not necessarily those of MLex.
Reproduction in any form is prohibited
without prior consent.
Front cover photo:
iStockphoto
Juliane von Reppert-Bismarck
Editor
Benchmarks IssueMLex Report | 05
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PRE D I CT I V E ANA L Y S I S O F RE G U L ATOR Y R I SK
BENCHMARKS
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Spring 2015
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