Two Societe Generale bankers were indicted for spreading misleading data related to the interest rate benchmark LIBOR, the U.S. Department of Justice said in a statement Thursday.
Danielle Sindzingre, global head of treasury based in London, and Muriel Bescond, head of treasury in Paris, were charged in U.S. District Court in Brooklyn with conspiring to contribute and contributing false information to the LIBOR panel, which sets the rate used to price futures contracts, interest rate swaps and other financial instruments.
Ms. Sindzingre and Ms. Bescond are said to have instructed the firm's Paris-based treasury desk to submit lower LIBOR contribution rates between May 2010 and October 2011 to enable Societe Generale to appear to be borrowing money at more favorable rates. The U.S. Justice Department said in the statement that "this was allegedly done with knowledge that the true rates at which Societe Generale was borrowing money were higher than the rates it was submitting as part of the LIBOR calculation."
Global banks contribute LIBOR rates to a panel at the British Bankers Association, which calculates the London interbank offered rate based on these submissions.
As a result, the false information provided by Ms. Sindzingre and Ms. Bescond altered the final U.S. dollar LIBOR calculation, thus affecting all financial transactions tied to it, the Justice Department said in the statement.
In total, the Justice Department estimated the alleged misconduct caused more than $170 million in harm to the global financial markets, according to the statement.
"The integrity of our global financial markets relies upon each of its participants providing complete and accurate information," acting U.S. Attorney Bridget M. Rohde said in the release.
Ms. Rohde added: "As alleged, the defendants acted in contravention of this principle and the laws designed to uphold it by causing their employer, Societe Generale, to submit falsified dollar LIBOR rates, which in turn affected financial transactions across markets worldwide. We will continue to vigorously root out and prosecute such crimes."
The FBI is investigating this matter, the Justice Department said.
Societe Generale responded in an emailed statement: "Societe Generale has received formal requests for information from several authorities, including the U.S. Department of Justice, in connection with investigations regarding submissions to the British Bankers Association for setting certain benchmark rates, including the London interbank offered rates. Societe Generale is cooperating with the investigating authorities."
A spokesman at Societe Generale would not comment on whether Ms. Sindzingre and Ms. Bescond are still employed at the firm.
