U.K. prosecutors are poised to arrest former traders and ratesetters at UBS AG, Royal Bank of Scotland Group Plc and BarclaysPlc within a month for questioning over their role in the Liborscandal, a person with knowledge of the probe said.

The arrests will be made by police under the direction ofprosecutors at the Serious Fraud Office within the next month, saidthe person, who declined to be identified because the matter isn'tpublic. Arrests in the U.K. are made at an early stage of theinvestigation, allowing police and prosecutors to question peopleunder caution and may not lead to charges.

The SFO has 40 people working on the probe into manipulation ofthe London interbank bank offered rate, a benchmark for financialproducts valued at $360 trillion worldwide, and has involved theCity of London Police, said David Green, the agency's director.

“Significant developments” in the case are coming “in the nearfuture,” Green said yesterday in an interview at his office inLondon without giving further details and declining to comment onany possible arrests.

The SFO opened the investigation in July at the request ofBritish politicians after Barclays was fined a record 290 millionpounds ($462 million) for rate manipulation. Regulators across theglobe are investigating claims banks altered submissions that wereused to set Libor in an effort to benefit traders, or to appearfinancially healthier than they were.

The arrests could be temporarily delayed because of disruptionsto the SFO's schedule caused by moving the prosecutor's officesfrom Elm Street to Trafalgar Square.

Egregious Attempts

Green said the agency is focusing on the most egregious attemptsto manipulate Libor and other related benchmarks, with probes intofirms, managers, traders and rate setters at lesser offenderscoming later.

Regulators in the U.S. and U.K. are probing how derivativestraders and bankers who submitted interest-rate data colluded torig benchmarks to benefit their own trades, and whether bankslow-balled submissions in 2008 to hide their true cost ofborrowing. Criminal probes by the SFO and U.S. Department ofJustice are running in parallel with civil investigations beingconducted by the DOJ's fraud division, the U.S. Commodity FuturesTrading Commission and the U.K. Financial Services Authority.

Barclays spokesman John McGuinness, UBS spokesman Richard Mortonand RBS spokesman Michael Strachan all declined to comment.

UBS and RBS are next in line to settle with the regulators,people familiar with the case have said. Edinburgh-based RBS hasfired four traders following an internal probe.

UBS has fired more than 25 people after an internal review ofinterest-rate manipulation, a person familiar with the matter said.Robert Diamond, who stepped down as Barclays chief executiveofficer after the fine, said 14 traders were involved in wrongdoingat the bank.

The SFO has “hoovered up all the stuff from the FSA and loadedit onto our computers,” Green said. It has also received evidencefrom the U.S. Federal Bureau of Investigation and some of thebanks.

The SFO is cooperating with a request from the U.S. Departmentof Justice for access to information from the U.K., Green said.That could include investigators from the DOJ sitting in oninterviews that the SFO conducts with suspects, or having access toevidence the agency has gathered.

The request, which came under a mutual legal assistance treaty,or MLAT, was initially stalled while the SFO sought to get up tospeed on the case. The DOJ submitted an amended request in recentmonths with “very substantial” information sought, Green said.

“Obviously when we first received it there was anxiety thatexecution of the request could mop up SFO resources,” he said. “Weare anxious to execute it” and will “certainly” assist, hesaid.

Green said the agency, while working closely with the DOJ, isalso competing to bring charges first in order to handle theprosecution of any British citizens in the U.K., reducing thechance of extradition.

The SFO's previous director, Richard Alderman, had declined toget involved in the case. Green took over as director in April.

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