3 Min Read
By Kirstin Ridley
LONDON, Feb 28 (Reuters) - 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 Tuesday.
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 trial.
"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