Libor Fixing Scandal: Barclays Pays Fired NY Trader Dong Kun Lee $2.1m

The US' Financial Industry Regulatory Authority has ordered Barclays Capital to pay New York based trader Dong Kun Lee $2.1m after the bank fired him in connection with the Libor fixing scandal.

According to regulatory filings, the watchdog said Barclays would have to pay millions of dollars in damages to Kun Lee after it dismissed the derivatives trader on 30 July 2012, for allegedly engaging "in communications involving inappropriate requests relating to Libor".

Kun Lee originally asked for Barclays to stump up $5.3m (£3.3m, €3.9m) in damages, but then later reduced his request to about $2.1m, after filing an arbitration claim alleging the bank's of breach of contract and violation of New York labour law among other things.

Barclays declined to comment.

Libor valuations directly influence the value of trillions of dollars of financial deals between banks and other institutions.

The benchmark reference rates are used in euro, US dollar and British sterling over-the-counter (OTC) interest rate derivatives contracts and exchange traded interest rate contracts.

Libor Fixing Scandal

Barclays was the first to settle with UK and US authorities in June 2012 for £290m.

Nearly six months later UBS agreed a record $1.5bn fine with US, UK and Swiss authorities and also admitted to one count of wire fraud relating to rigging rates in Yen.

In February 2013, RBS became the third major bank to settle with the Commodity Futures Trading Commission (CFTC), Department of Justice (DoJ) and Financial Conduct Authority (FCA) for £390m relating to civil and criminal charges.

RBS subsidiary, RBS Securities Japan Limited, also pleaded guilty to one criminal charge of wire fraud.

In September this year, the US Commodity Futures Trading Commission and Britain's Financial Conduct Authority fined the world's largest interdealer brokerage Icap for its role in the manipulation of the interbank lending rate Libor.

Icap was also ordered to pay £14m to the FCA and £41m to the CFTC after a significant number of brokers, including two managers, attempted to rig rates between October 2006 and November 2010.

In October, Britain's Serious Fraud Office revealed in court that another 22 people could face criminal charges related to the manipulation of Libor.

During a hearing in Southwark Crown Court in London, prosecutors revealed that 60 investigators are working on the probe, into the attempted rigging of the key interbank lending rate Libor, and that many more bank employees were involved.