Libor Case: Former Traders with Barclays Found Guilty
Three former traders with Barclays Plc were declared guilty of manipulation of Libor rates nearly four years after the bank paid hundreds of millions in fines for the fixing of the benchmark rates behind over $350 trillion of securities.
Late last week, Alex Pabon who is 38, Jay Merchant who is 45 and Jonathan Mathew who is 35, were convicted of conspiring with other employees at Barclays to fix London’s interbank offer rate from June 1 of 2005 to August 31 of 2007.
On Monday, the jury could not reach a verdict on Ryan Reich and Stylianos Contogoulas. The presiding judged placed restrictions on reporting the initial verdicts last week until deliberations by the jury were completed.
A sixth former trader Peter Johnson the main submitter of Libor pleaded guilty in October of 2014.
The £290 million or $384 million fine Barclays received in 2012 triggered a worldwide scandal and transformed Libor from just a niche rate that traders and brokers knew into a phrase synonymous with greed by bankers.
Just days after Barclays became the first bank to settle, its CEO Bob Diamond was let go and regulators imposed shortly thereafter $9 billion in penalties against a host of different banks.
Prosecutors spend this trial using testimony and e-mails trying to link the former traders to a conspiracy that was beneficial to both themselves and the bank financially.
The two defendants – Reich and Contogoulas – who the jury could not reach a verdict on will now wait to see if The Serious Fraud Office will decide to try them again.
Later this week, each of the three traders will be sentenced. The three did not comment after the jury announced its verdict.
The men were stoic with their reactions when the verdict was read while one of the wives of the three broke down crying.
The deliberations of jury last for 10 days and included notes that left defendants without a clue as to where the panel had been leaning.
One note said that one verdict was reached but they were deadlocked on four others. The judge gave the jury instructions that allowed them to reach verdicts that were non-unanimous, which often brings about a quicker decision.
Instead, deliberations went into a second week then the jury sent another note indicating they had three verdicts. The judge decided he wanted the three verdicts, but barred the media from reporting on them until Monday.