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Hedge Fund That Hired "Master Manipulator" From Deutsche Bank Implicated In LIBOR Suit

In many ways, Christian Bittar has come to personify the global effort to manipulate the world’s most important benchmark rates. Regular readers will remember Christian as the Deutsche Bank prop trader we first introduced in 2012 and who we later noted was dismissed from the German lender only to be hired at BlueCrest Capital Management. Here’s our six-point summary from 2013:

  1. Deutsche tells an internal prop trader to "do everything legally and by the book or else."
  2. Bittar colludes with virtually everyone else under the sun to generate billions in profits;
  3. Bittar makes tens if not hundreds of millions of bonuses for himself;
  4. Finally, DB no longer can hide the deception and claws back a portion of Bittar's bonuses, while washing its hands of the full affair;
  5. He went to work for BlueCrest Capital Management LLP, Europe’s third- biggest hedge fund with $30 billion under management.

But that wouldn’t be the end of it.

Earlier this year, after Deutsche Bank agreed to pay $2.5 billion to settle rate rigging charges, we got a look at exactly what Bittar said on the way to fixing the fixes (so to speak). You can view some of the highlights here

Finally, when WSJ released the full text of a letter sent to Deutsche Bank by German financial watchdog BaFin, we got an in depth look at the relationship between Bittar and former CEO Anshu Jain. Unsurprisingly, Bittar’s lucrative trading activities at the bank made him a star in the eyes of upper management. 

Now, none other than Bittar’s post-Deutsche Bank employer BlueCrest is being sued along with the usual suspect banks for conspiring to rig the Swiss franc LIBOR rate. The allegations appear to stem from the documents which were made available when Deutsche Bank settled with US regulators earlier this year. BlueCrest is the only hedge fund named.

From the complaint:

On April 23, 2015, the NYSDFS revealed that BlueCrest conspired with Defendant Deutsche Bank to manipulate Swiss franc LIBOR for its financial benefit, requesting that Deutsche Bank make a false 1 month Swiss franc LIBOR submission on February 10, 2005. Upon information and belief, that request was sent via electronic communication to a Deutsche Bank Swiss franc LIBOR-based derivatives trader and/or Swiss franc LIBOR submitter located in New York.

 

Defendant BlueCrest has deep connections to the Contributor Bank Defendants, including several individual traders directly involved in the manipulation of LIBOR. In addition to being funded in part by Defendant JPMorgan, BlueCrest hired Deutsche Bank master manipulator Christian Bittar after he was publicly fired by Deutsche Bank for his involvement in various rate-rigging schemes.

So there you have it. Precisely what we said more than three years ago has been proven to be unequivocally (and usurprisingly) true.

To wit (ca. 7/18/2012): 

The bankers who were allegedly involved in Libor manipulation in some capacity in their previous lives working for banks, decided to quietly depart under mutually acceptable conditions and find new lives, still trading Libor and IR derivatives, in some of the best known, and even less regulated, hedge funds and private banks.

 

Our question then is the following: while much has been said about Lieborgate as being purely associated with the 16 BBA USD fixing member banks, just who else made money, and [are others in the financial community] about to be exposed for having profits far more from Lieborgate than any of the BBA member banks?

 

Because if the stigmatized traders were accepted with open arms at various hedge funds, one would think there may, just may have been, some quid pro quo in the past (for those who have worked in the financial industry this needs no further explanation).

Bluecrest Lawsuit