The Wall Street Journal reports that U.S. authorities are pushing for a settlement of interest-rate-rigging allegations with Royal Bank of Scotland that would result in a unit of the big British bank pleading guilty to criminal charges in addition to paying a penalty, according to people briefed on the negotiations.
RBS executives are resisting any guilty plea, fearful that it could lead clients to cut off activity with the bank and that it could increase exposure to costly litigation, some of these people said. The negotiations reflect a newly tough stance by U.S. authorities, who until recently have faced criticism for rarely pursuing criminal action against big banks.
The settlement is likely to include roughly $790m in penalties levied by U.S. and British authorities, although the exact amount remains in flux, these people said. The deal, under negotiation since last fall, could be completed within the next two weeks.
In the meantime, The Financial Times reports that UK Chancellor High George Osborne is braced for a new political backlash over bank bonuses, as state-controlled Royal Bank of Scotland prepares to pay as much as $393m to staff at an investment banking division heavily implicated in the Libor-rigging scandal.
Finally, The Daily Telegraph reports that Broker Tullett Prebon has risked inflaming the row over the tax affairs of top earners and companies by agreeing to delay bonuses for senior executives so they can take advantage of April’s tax cut.
The company, whose chief executive Terry Smith is one of the City’s most outspoken figures, is deferring bonuses for just over 20 staff so that any income over £150,000 is taxed at 45pc rather than the current 50% rate.
U.S. Wants Criminal Charges for RBS (subscriber content)
RBS bonuses spell trouble for Osborne (subscriber content)