LONDON - A senior executive at Royal Bank of Scotland’s Japanese investment banking unit is expected to resign in the wake of the rate-rigging scandal, according to a person with direct knowledge of the matter.
Ryusuke Otani, who runs the British bank’s investment banking business in Japan, will likely step down by the end of the week, the person added, who spoke on the condition of anonymity because he was not authorized to speak publicly.
The resignation of Mr. Otani, a former Citigroup banker, follows moves by Japanese authorities to punish Royal Bank of Scotland over its role in the manipulation of the London interbank offered rate, or Libor.
Last week, the Securities and Exchange Surveillance Commission of Japan asked local regulators to issue a so-called administrative action against the Edinburgh-based bank after some of its traders attempted to alter a key benchmark rate for financial gain.
In February, Royal Bank of Scotland, which is 81 percent owned by British taxpayers after receiving a bailout during the financial crisis, reached a $612 million settlement with American and British authorities in connection with the Libor scandal. As part of the agreement, the firm’s Japanese unit was forced to plead guilty to criminal wrongdoing.
Global authorities already have fined three banks - Barclays, UBS and Royal Bank of Scotland - a collective $2.6 billion for their roles in the manipulation of Libor. Other major financial institutions, including Citigroup and Deutsche Bank, are still under investigation in the rate-rigging scandal, which affected complex financial productions worth trillions of dollars, combined.
In the latest regulatory action against Royal Bank of Scotland, Japanese authorities said on April 5 that some of the firm’s traders tried to profit from altering rate submissions to yen Libor from 2006 to 2010. The British bank also was sanctioned for failing to spot the wrongdoing over the five-year period.
Japanese regulators have taken similar steps against UBS and Citigroup after investigations found that some of the banks’ traders had attempted to manipulate key benchmark rates in the country.
Royal Bank of Scotland’s chief executive, Stephen Hester, apologized in February for the bank’s role in the scandal, adding that six people had been fired because of their role in the manipulation. A further eight banks had left the bank because the wrongdoing was discovered, while a further six individuals have been disciplined, but remain with the bank.
Another derivatives trader, Simon Green, was fired last month in connection to the Libor scandal, according to a person with direct knowledge of the matter.
A spokesman for Royal Bank of Scotland declined to comment.
