Three former employees of Barclays Bank have been convicted of conspiracy to defraud in connection with a Serious Fraud Office (SFO) investigation into the manipulation of US dollar Libor, the global benchmark interest rate
Jonathan Mathew, Jay Merchant and Alex Pabon were convicted by a jury at Southwark Crown Court after an 11-week trial. The jury could not reach verdicts for two of their co-defendants, Stylianos Contogoulas and Ryan Michael Reich.
The SFO maintained that whilst employed by Barclays, the convicted defendants conspired with each other and other individuals to procure or make submissions of rates into the US dollar Libor setting process, thereby intending to prejudice the economic interests of others.
Merchant and Pabon were both Libor traders, while Mathew was a submitter. A sixth individual, Peter Johnson, a senior submitter and head US dollar cash trader, pleaded guilty to conspiracy to defraud in October 2014. Their offences took place between June 2005 and September 2007.
David Green, director of the SFO, said: ‘The key issue in this case was dishonesty. By their verdicts the jury demonstrated they were sure that the conduct of three of the defendants, Jonathan Mathew, Jay Merchant and Alex Pabon was dishonest. Senior Libor submitter Peter Johnson accepted he had been dishonest when he pleaded guilty to the offence in October 2014.
‘The trial in this country of American nationals also demonstrates the extent to which the response to Libor manipulation has been international and the subject of extensive cooperation between US and UK authorities.’
Johnson, Mathew, Merchant and Pabon will be sentenced at a hearing later this month. The SFO now has 14 days from today in which to consider whether to seek a re-trial of Contogoulas and Reich.
This brings to five the number of convictions as a result of the SFO’s investigation. Tom Hayes was convicted in August 2015 and is serving an 11 year prison sentence. Six other defendants were acquitted of charges against them in January 2016 in the second Libor trial. A total of 19 individuals have been charged so far. Criminal proceedings have been issued to a further five people, who are currently resident abroad.
The SFO says its Libor investigation continues, with six individuals awaiting trial for the alleged manipulation of EURIBOR on 4 September 2017.
