By Kirstin Ridley
LONDON Feb 28 Two former Barclays
traders showed scant regard for honesty and integrity when they
conspired to rig global Libor interest rates, a lawyer for the
UK Serious Fraud Office (SFO) told a London jury trial on
Greek national Stylianos Contogoulas and Ryan Reich, an
American, deny one count of dishonestly skewing Libor, a
benchmark for interest rates on about $450 trillion of financial
contracts and loans worldwide, to boost profits and defraud
others between June 2005 and September 2007.
Emma Deacon, prosecuting for the SFO, said the men
"essentially cheated" others when they schemed with London-based
Libor submitters, responsible for sending the bank's daily cost
of borrowing estimates to a Libor administrator, to try to nudge
dollar Libor rates to bolster their trading positions.
"So this case concerns traders at Barclays bank rigging, to
their own advantage, or that of the bank ... a global benchmark
interest rate," she told the jury on the first day of a six-week
"In doing so, they were driven by money. Their singular goal
was to make more profit on their trading and you will see,
insofar as they stood in the way, honesty and integrity were
matters which were entirely expendable."
Deacon said Contogoulas, 45, was the London end of a team of
New York-based traders who were part of an alleged scam that
started in the summer of 2005, with the first evidence of New
York-based Barclays traders requesting Libor rates from
London-based rate submitters.
Two former London-based submitters, Peter Johnson and
Jonathan Mathew, have been convicted of conspiracy to defraud in
a separate Libor trial, the jury were told.
Presenting the jury with a cache of emails detailing trader
rate requests, Deacon said Contogoulas was well placed in London
to help to lobby submitters when his New York colleagues were
not in the office, because of the time difference.
Between December 2005 and February 2006, the prosecutor said
there was "clear evidence" that traders and submitters were
ignoring the proper basis for setting Libor rates.
Reich and Contogoulas are expected to lay out their defence
later this week.
Allegations that banks and brokerages attempted to rig rates
such as Libor (the London interbank offered rate), the average
rate at which major banks say they can borrow funds from each
other in different currencies over various time frames each day,
first emerged during the global financial crisis in 2008.
Barclays was the first bank to settle regulatory allegations
of rate fixing in 2012, paying a then-record $450 million fine.
Contogoulas and Reich were employed at different times by
Barclays. The Greek former trader left Barclays in 2006 shortly
before New York-based Reich, 35, joined the bank the same year.
Contogoulas earned a salary of 60,000 pounds ($74,530) and a
bonus of 140,000 pounds in 2005 and Reich, for 2007, earned a
salary of $110,000 and a bonus of $690,000, the court heard.
($1 = 0.8050 pounds)
(Reporting by Kirstin Ridley. editing by Jane Merriman)