A senior banker from a leading UK bank has pleaded guilty to charges in connection with manipulating LIBOR.

A senior banker from a leading UK bank has pleaded guilty to charges in connection with manipulating LIBOR.

The former banker admitted to conspiracy to defraud at Southwark Crown Court in London last Friday and becomes the first person in the UK to be convicted of rigging the LIBOR rate.

“This is the first criminal conviction arising from the Serious Fraud Office's LIBOR investigation. Eleven other individuals stand charged and await trial,” the Serious Fraud Office said in a statement.

The man and the bank cannot be named for legal reasons.

The SFO's investigation began in July 2012 after it emerged that a number of banks were manipulating the LIBOR rate for their own benefit.

So far, seven banks and brokerages have been fined by UK and US authorities in the LIBOR-rigging investigation, paying more than $3 billion.

The SFO has charged 11 other individuals who are currently awaiting trial and the investigation into others continues.

US charges

According to The New York Times, the US Justice Department is planning to indict a number of individual bank employees in connection with LIBOR manipulation.

The publication reports that the dozen banks under investigation include Deutsche Bank, JP Morgan Chase, UBS, Citigroup and Barclays. At least one bank is expected to be charged by the end of the year.

Those individuals likely to be charged in connection include traders and their bosses rather than chief executives.

Meanwhile, The Wall Street Journal reports that US and UK regulators are in talks with Deutsche Bank to reach an agreement over LIBOR-rigging allegations, which would make it the eighth financial institution to settle.

Citing people familiar with the matter, The Wall Street Journal said regulators are hoping to convince Deutsche Bank to pay well into the hundreds of millions of dollars, although talks are not expected to conclude until 2015.

In July, partly state-owned Lloyds Banking Group was fined $370 million by UK and US authorities for the manipulation of LIBOR and other benchmark failings, while Rabobank agreed to pay more than $1 billion in criminal and civil penalties for its role in manipulating the benchmark in October last year. 

Meanwhile, two years ago, Barclays was fined $450 million by US and UK regulators for trying to manipulate LIBOR, which led to the resignations of Barclays' chief executive Bob Diamond and chairman Marcus Agius in the UK.

Last month, Lloyds Banking Group dismissed eight staff following a major investigation into LIBOR rigging, saving around £3 million ($4.82 million) in unpaid bonuses as a result.

At the end of last year, the European Union also levied a record fine of €1.7 billion ($2.16 billion) on six European and US banks, including Deutsche Bank, Societe Generale, Royal Bank of Scotland, and Citigroup.

LIBOR is based on the interest rates leading banks charge when loaning money to other banks overnight, which is supposed to represent the cost of a bank's lending activities.

As the primary benchmark for short-term interest rates globally, LIBOR is used for many interest rate contracts, mortgages, credit cards, student loans and other consumer-lending products.

The scandal arose both during and before the financial crisis when it was discovered that banks were manipulating rates so as to profit from trades or give the impression they were more credit-worthy than they actually were.