Skip to content. | Skip to navigation

Personal tools
You are here: Home Breaking news European Parliament votes for prison for market fraudsters

European Parliament votes for prison for market fraudsters

— filed under: , , , , ,
European Parliament votes for prison for market fraudsters

Stock exchange

(STRASBOURG) - Financial fraudsters who commit serious crimes such as rigging interest rates could face a minimum of four years in prison, under a European Parliament vote on Tuesday to restore confidence.

"Today's vote is a big step forward in enabling courts across the EU to halt market abuse," said British Social Democrat MEP Arlene McCarthy, who steered the legislation through Parliament.

"This is the first law to introduce tough EU-wide criminal penalties for market abuse, with a minimum jail sentence of four years for serious offences such as insider dealing and market manipulation," McCarthy said in a Parliament statement.

She said that a law across the European Union was required because several countries -- such as Austria, Finland, Spain and the Czech Republic -- imposed only fines, not prison terms, for such offences.

Parliament overwhelmingly approved the new rules by 618 votes for and 20 against, reflecting deep-seated suspicions among MEPs about the financial sector which is widely blamed for the 2008 global crash and subsequent debt crisis which nearly brought down the eurozone.

"Criminals who get rich by manipulating markets and insider dealing should not get away with just an administrative penalty," said MEP Emine Bozkurt, a Dutch Social Democrat who pushed for the 4-year minimum sentence.

"I am proud that my proposal of at least four years' imprisonment for these offences made it into the final text," Bozkurt said.

The rules set tougher criminal penalties for "serious market abuses such as unlawful disclosure of information, insider dealing or market manipulation and also inciting, aiding or abetting them," the statement said.

The minimum 4-year jail term would apply to "the most serious forms of insider dealing or market manipulation and no less than two years for unlawful disclosure of information."

Parliament cited the scandal over manipulation of LIBOR and EURIBOR, the benchmark interest rate quotes used globally to set the price for lending, as one example meriting the mimimum sentence.

Recent prosecutions have shown LIBOR fraud around the world, with traders at many of the major banks caught out, including Citigroup, UBS, HSBC, Deutsche Bank and JP Morgan Chase.

Swiss giant UBS was fined $1.5 billion by British, Swiss and US regulators in December 2012 for manipulating LIBOR.

In the most recent case, three former traders at Rabobank were charged in the United States where they could face up to 30 years in jail on each of the counts against them.

Parliament's rules now go to the EU's 28 member states for formal approval, with implementation coming two years after that.

Recovering from the debt crisis, the EU has adopted a whole series of measures to tighten up oversight over the banking system in the hope of preventing any repeat.

Directive on criminal sanctions for market 
abuse - background guide

Document Actions