The Canadian watchdog said lawyers acting for the cooperating bank had told it that traders at six banks on the yen Libor panel—Citigroup Inc., Deutsche Bank AG, HSBC Holdings PLC, J.P. Morgan Chase & Co., Royal Bank of Scotland Group PLC and UBS—"entered into agreements to submit artificially high or artificially low" quotes, according to the court documents.
The traders used emails and instant messages to tell each other whether they wanted "to see a higher or lower yen Libor [rate] to aid their trading position(s)," according to a court filing.
Each of the traders would then "communicate internally" with the person at their bank who was responsible for submitting the Libor quote, before letting each other know if this attempt to influence the quote had worked. "Not all attempts to affect Libor submissions were successful," the regulator said in the court filing.
The Canadian regulator said it is investigating whether the traders also "conspired" with individuals at interdealer broker firms, according to the documents. These brokers act as go-betweens for the different banks, advising them on the interbank borrowing rates on which Libor quotes are based.
The brokers were asked by the traders "to use their influence with yen Libor submitters to affect what rates were submitted by other yen Libor panel banks," including banks that were part of the alleged conspiracy, according to a court filing.