BCS Barclays PLC

LONDON—The U.K.'s Serious Fraud Office is seeking a retrial of two former Barclays employees charged with conspiracy to defraud in relation to the manipulation of Libor interest rates, after a jury earlier failed to reach verdicts for the pair.

Earlier this week, the SFO announced that it had convicted three former Barclays employees in connection with the investigation, but that the jury had not reached a verdict on Stylianos Contogoulas and Ryan Michael Reich—who were both traders—following the 11-week trial.

British citizens Jonathan Mathew and Jay Merchant as well as American Alex Pabon were all convicted of conspiracy to defraud, the SFO announced Monday. Mr. Merchant and Mr. Pabon were both Libor traders, while Mr. Mathew was a submitter.

Peter Johnson, a senior submitter and head U.S. dollar cash trader at Barclays, pleaded guilty to conspiracy to defraud in October 2014.

The SFO alleged the men acted dishonestly by trying to influence the London interbank offered rate, a benchmark used to set interest rates on trillions of dollars in securities and loans, to advantage Barclays and themselves financially and to defraud those with whom they were trading.

Following the brief statement by the SFO Wednesday, a lawyer for Mr. Contogoulas said that his client was disappointed by the announcement seeking a retrial. A lawyer for Mr. Reich declined to comment immediately.

The Wall Street Journal first drew attention eight years ago to industry concerns around how Libor was being set, sparking a global probe that has resulted in at least 13 convictions and billions of dollars in penalties paid by banks. Barclays paid $450 million to U.S. and U.K. authorities in 2012 and admitted that traders and managers had sought to rig the rate.

It was the third criminal Libor trial in the U.K. after the SFO's conviction in August of Tome Hayes, the alleged ringleader of a separate Libor-rigging conspiracy, and the acquittal in January of six former brokers who were accused of conspiring with Mr. Hayes. Mr. Hayes is serving an 11-year sentence.

U.S. prosecutors have charged more than a dozen traders and other bank employees with trying to manipulate Libor, including traders in London and elsewhere. To date, four have pleaded guilty and two others were convicted at trial.

In the recent trial, the SFO alleged that the six Barclays employees conspired to manipulate dollar Libor between June 2005 and September 2007. In the trial, jurors were shown emails and messages sent by Messrs. Merchant, Pabon, Reich and Contogoulas to Barclays's Libor submitters, Messrs. Johnson and Mathew.

The messages showed that the four traders had requested rates that would benefit their trading books, and that Mr. Mathew at least in some cases complied, but the men and their lawyers told the court they had acted honestly and with the knowledge of their bosses.

Mr. Mathew told the court he was never trained in his role as a Libor submitter and learned from and copied what Mr. Johnson was doing. He, Mr. Merchant and Mr. Pabon were found guilty by the jury last Wednesday but the judge imposed temporary reporting restrictions while the remaining verdicts were decided.

Before concerns arose around Libor in 2008, banks participating in setting the benchmark faced little scrutiny of how they came up with their daily submissions. Meant to reflect a bank's estimated cost of borrowing, many banks' Libor submitter and traders regularly shared information with each other, brokers and traders at other banks, according to evidence presented in the three London trials.

Write to Josie Cox at josie.cox@wsj.com and Margot Patrick at margot.patrick@wsj.com

(END) Dow Jones Newswires

July 06, 2016 09:15 ET (13:15 GMT)

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