Libor Fixing Scandal: SFO Silences WSJ Journalist David Enrich With Imprisonment and Fine Threats

A London court has silenced The Wall Street Journal from publishing the names of individuals that the government plans to implicate in a Libor fixing criminal-fraud case, in England and Wales, after threatening its European banking editor with imprisonment, a fine, or asset seizure.

According to an order from the Crown Court in Southwark, David Enrich, and third parties, is forced to comply with a request by the UK's Serious Fraud Office, by not printing the names of individuals on the internet, in the newspaper, or in any television broadcast that someone in England or Wales may see.

This includes the deletion of any existing articles that may mention the individuals names.

He is, as well as the rest of the UK media, is only allowed to print the names of formally charged ex-traders and brokers, Tom Hayes, Terry Farr and James Gilmour.

"This injunction is a serious affront to press freedom," said Dow Jones & Co, publisher of the Journal in a statement.

"We have been left with no choice but to remove the previously published story from WSJ.com and to withhold publication from the print edition of The Wall Street Journal Europe. However, we will continue to vigorously fight the injunction in the coming days."

However, while the article was taken down from the website, the WSJ said it will appear in Friday's print editions of the Journal circulated in the US and in Asia.

After the WSJ received word of the order from the SFO by email at 1918 BST on 17 October, the article mentioning the individuals' names had already been published on Dow Jones Newswires and the Journal's website, WSJ.com.

However, British prosecutors expect to publicly name the individuals next week.

The Libor Fixing Scandal

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.

According to FSA data, the notional amount outstanding of OTC interest rate derivatives contracts in the first half of 2011 has been estimated at $554tn.

The total value of volume of short term interest rate contracts traded on LIFFE in London in 2011 was €477tn, including over €241tn relating to the three month Euribor futures contract, which is actually the fourth largest interest rate futures contract by volume in the world.

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

Nearly six months later and UBS agreed a record $1.5bn fine with US, UK and Swiss authorities for its role in manipulating a number of key benchmark interbank lending rates - including a record £160m penalty with the FSA.

It 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 CFTC, DoJ and FSA for £390m for civil and criminal charges.

The CFTC charged the bank with false reporting, manipulation and attempted manipulation of the interbank lending rate that was denominated in yen and Swiss francs between 2006 and 2010.

It involved more than a dozen RBS derivatives and money market traders..

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

On 18 June, the SFO charged Hayes with eight counts of fraud, in connection with the investigation by criminal investigation unit into the manipulation of Libor.

The SFO confirmed he was one of the three individuals arrested and interviewed on 11 December, 2012.

One month later, the SFO charged the other two individuals, Farr and Gilmour, who were former brokers with RP Martin Holdings, with conspiracy to defraud over Libor rates.