Barclays (LSE:BARC)
Historical Stock Chart

From Apr 2019 to Apr 2024

By Margot Patrick 

LONDON--Six former brokers with nicknames including "Lord Libor" and "Big Nose" helped convicted bank trader Tom Hayes rig interest rate benchmarks for financial reward, a London court heard Tuesday on the first day of a criminal trial.

Prosecutor Mukul Chawla, acting for Britain's Serious Fraud Office, said the former employees of ICAP PLC, RP Martin Holdings Ltd. and Tullett Prebon PLC were "willing and enthusiastic" participants in attempts by Mr. Hayes and other to manipulate rates.

Darrell Read, Colin Goodman, Danny Wilkinson, all former ICAP employees, Terry Farr and James Gilmour, who worked at RP Martin, and Noel Cryan, a former Tullett Prebon broker, are charged with conspiring to rig rates with Mr. Hayes, colleagues and other traders. Among the allegations is that the brokers encouraged or attempted to persuade traders at banks to submit false Libor rates. All six men have pleaded not guilty.

In a separate trial over the summer, Mr. Hayes was convicted of conspiring with others to manipulate the London interbank offered rate, or Libor, to make money for himself and his employers. He was sentenced to 14 years in prison and is seeking to appeal his conviction and sentence.

Mr. Chawla told the 12-person jury that within a total period spanning August 2006 and September 2010, the six defendants, through their alleged actions interfered with the "critical financial process" of benchmark setting, in order to help Mr. Hayes and other traders make a profit. Libor is the estimated rate banks charge to borrow money from each other.

"They provided enthusiastic assistance for a simple motive: financial," Mr. Chawla alleged.

In a brief description of each broker's work history and responsibilities, Mr. Chawla referred to nicknames used by the defendants and their contacts, including Mr. Read's moniker "Big Nose" and Mr. Goodman's signoff on messages as "Lord Libor."

The SFO is expected to lay out its case over five days before presenting evidence and expert witnesses to the jury. Lawyers for the defendants will then present their cases around mid-November, in a trial that is scheduled to last up to 14 weeks.

Mr. Chawla on Tuesday told the jury that the alleged actions of the brokers led to the manipulation of an interest-rate benchmark that is linked to trillions of pounds in financial transactions including loans and mortgages, and is crucial to market confidence.

As he described the case, Mr. Chawla urged jurors not to panic over financial jargon or the reams of written and phone communications that they would have to consider in reaching their conclusions about each defendant.

"At its heart, this is a simple case. You don't have to be bankers or in the financial industry to understand," Mr. Chawla said. "The focus...is whether these alleged conspiracies existed, and whether these defendants by doing what they did were dishonest."

A global investigation into Libor manipulation started in 2008 after an article in The Wall Street Journal and other reports questioned the accuracy of the rate in the lead-up to the financial crisis. In 2012, Barclays PLC became the first bank to settle rate-rigging allegations with global authorities, sparking the resignation of top executives and leading to global regulatory reforms around market benchmarks.

In all, the probe has ensnared at least 18 financial institutions and around three dozen individuals and a U.S. trial of bank traders starts later this month.

Write to Margot Patrick at margot.patrick@wsj.com

Access Investor Kit for "Barclays Plc"

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=GB0031348658

Access Investor Kit for "Barclays Plc"

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US06738E2046

(END) Dow Jones Newswires

October 06, 2015 10:25 ET (14:25 GMT)