Barclays’ Dearlove Accepts Role in Libor Rigging, Judge Says

Barclays Plc (BARC)’s head of money markets, Mark Dearlove, said in a court filing that he was involved in the manipulation of the London interbank offered rate, according to a judge.

Dearlove “accepts that he was involved in and aware of manipulation of Libor,” Judge Julian Flaux said in court at a hearing today. “He explained in his witness statement how it came about.”

Barclays was fined 290 million pounds ($477 million) in 2012 for rigging Libor, the benchmark interest rate used by $300 trillion of contracts worldwide. The court document is part of a lawsuit filed by Guardian Care Homes against the London-based bank over an interest-rate swap deal linked to the benchmark.

Former Barclays Chief Operating Officer Jerry Del Missier told lawmakers in July 2012 that he instructed Dearlove to submit artificially low rates, after being instructed to do so by former Chief Executive Officer Robert Diamond. Del Missier and Diamond both resigned at the height of the Libor scandal.

Barclays has repeatedly said that Guardian’s suit is baseless. The company, which provides living facilities for the elderly, argues that it would never have bought the interest-rate swaps if it had known about the bank’s Libor rigging.

Own Judgment

Guardian “had a suite of advisers and a lot of financial experience and skill in-house and we believe entered into their swap agreements with sufficient understanding to exercise their own judgment,” Barclays said in a statement today.

Dearlove didn’t immediately return a message left with a colleague at Barclays.

Judge Flaux said Barclays would have to reveal the names of employees interviewed in its internal probe into Libor misconduct.

Today’s witness statement, which won’t be made public until a trial, isn’t the first time Dearlove’s role in the submission of Libor rates was discussed in court documents in the case.

Dearlove told another executive, Jonathan Stone, he’d received complaints about the bank’s submissions from an employee of JPMorgan Chase & Co., according to a December 2007 transcript released by the court in October.

He told Stone the bank’s submissions were “all wrong” and wanted to escalate the complaint, according to the transcript.

Dearlove was investigated by Barclays over his conduct and received a written warning from the bank in October 2012, Guardian Care Homes said in court documents today.

Dearlove reported his concerns about Libor to compliance officers, the head of the legal department and other senior management, the documents released today show.

The cases is Graiseley Properties Ltd & Ors. v. Barclays Bank Plc, case no. 12-1259, High Court of Justice, Queen’s Bench Division.

To contact the reporters on this story: Gavin Finch in London at gfinch@bloomberg.net; Kit Chellel in London at cchellel@bloomberg.net

To contact the editors responsible for this story: Simone Meier at smeier@bloomberg.net; Anthony Aarons at aaarons@bloomberg.net

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