Ex-Barclays bankers charged over Libor

File picture: Toby Melville, Reuters

File picture: Toby Melville, Reuters

Published Feb 17, 2014

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London - Britain's fraud agency started criminal proceedings against three former bankers at Britain's Barclays Plc on Monday for the alleged manipulation of Libor interest rates.

The Serious Fraud Office (SFO) said it has charged Peter Charles Johnson, Jonathan James Mathew and Stylianos Contogoulas with conspiracy to defraud between June 2005 and August 2007.

The SFO last year brought charges against three former employees of Swiss bank UBS and UK brokerage RP Martin, the first people to face trial in connection with a global investigation into a rate-rigging scandal that sparked intense criticism of standards across the industry.

Barclays paid $450 million in July 2012 to settle allegations from US and UK regulators that it had manipulated Libor interest rates, prompting the resignations of its chairman and chief executive and a barrage of criticism about standards and culture.

Libor rates, designed to reflect the wholesale cost of loans, are used to help to price hundreds of trillions of dollars worth of financial products worldwide, ranging from derivatives to mortgages.

Johnson was a US dollar Libor-submitter in London.

The Financial Times said Mathew reported to Johnson and signed a non-prosecution agreement with the US Department of Justice in 2012 before Barclays' settlement, whereby he agrees to co-operate and avoids any criminal charge.

Until now investigations have centred on alleged rigging of yen Libor.

Barclays declined to comment on Monday.

All three men are listed as “inactive” on the UK financial regulator's register of regulated staff.

It showed Johnson left Barclays on September 27, 2012 and Mathew left a day later.

Contogoulas left Barclays in April 2006 and joined Merrill Lynch three months later as a rates trader.

Merrill was not one of the banks that submitted prices used to set Libor prices.

It was taken over by Bank of America and Contogoulas left the bank in September 2011, the register shows.

Bank of America declined to comment.

Eight banks and RP Martin have paid penalties of almost $6 billion for the alleged manipulation of Libor and its euro equivalent, Euribor.

UBS, Royal Bank of Scotland and Rabobank have paid bigger settlements than Barclays over Libor, and more banks are expected to face fines as regulators in the United States and Britain continue to investigate.

The SFO's investigation into Libor began in July 2012 and it said it continues to work with Britain's Financial Conduct Authority and the US Department of Justice on the case.

It said the former Barclays staff would appear at Westminster Magistrates' Court at a future date.

The SFO is under pressure after a series of high-profile setbacks, and its boss David Green has staked his reputation on the success of high-profile investigations such as Libor.

It brought charges in relation to alleged Libor rigging against Tom Hayes, a former trader at UBS and Citigroup, last June and started proceedings against Terry Farr and James Gilmour, former brokers at RP Martin, last July.

The three men pleaded not guilty in December.

Hayes' trial is expected to start in January 2015.

Regulators are also now investigating how other benchmarks are set, such as in foreign exchange and commodities markets. - Reuters

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