Former Brokers Stand Trial Over Libor
October 06 2015 - 10:40AM
Dow Jones News
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
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(END) Dow Jones Newswires
October 06, 2015 10:25 ET (14:25 GMT)
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