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Former Barclays Employees Charged Over Libor Rigging

Barclays Headquarters
The headquarters of Barclays Plc stand beyond a metal security fence in the Canary Wharf business and shopping district in London. Photographer: Chris Ratcliffe/Bloomberg

(Corrects date on FCA website of when Contogoulas left Merrill Lynch in fifth paragraph of story published Feb. 17.)

Feb. 17 (Bloomberg) -- Three former Barclays Plc employees were charged by U.K. prosecutors with conspiring to manipulate Libor, bringing the number of people accused in global probes to more than a dozen.

Peter Charles Johnson, 59, Jonathan James Mathew, 32, and Stylianos Contogoulas, 42, were charged with conspiring to defraud between June 2005 and August 2007, the Serious Fraud Office said in an e-mailed statement today. The charges are the first related to manipulation of U.S. dollar Libor, the agency said, while previous cases were linked to interest-rate benchmarks tied to the Japanese yen.

Prosecutors and regulators around the world are investigating whether more than a dozen firms colluded to rig the London interbank offered rate, or Libor, and related benchmarks. Barclays was the first bank fined over Libor in June 2012 by U.S. and U.K. authorities. The London-based lender’s then-Chief Executive Officer Robert Diamond resigned over the scandal.

Roland Ellis, a lawyer for Contogoulas, said his client “intends to defend the allegations” against him.

Will Bowen, a spokesman for Barclays, as well as lawyers for Johnson and Mathew, declined to comment on the charges. The defendants are scheduled to appear at a London criminal court on Feb. 26, the SFO said.

September 2012

Johnson and Mathew worked for Barclays from early 2001 until September 2012, according to the finance regulator’s register of people approved to work in the industry. Contogoulas worked for Barclays from 2002 until 2006 before joining Merrill Lynch, where he was employed until September 2011.

The SFO has previously charged Tom Hayes, a former UBS AG and Citigroup AG banker, and former RP Martin brokers Terry Farr and James Gilmour. Hayes is scheduled to go on trial in January, with the others following later next year. The charges against the trio relate to yen Libor.

The U.S. has charged eight people, including Hayes. Former Rabobank traders, another former UBS trader, and three former ICAP brokers have also been accused by the Justice Department. None are in U.S. custody.

Firms including Barclays and UBS have been fined a total of about $6 billion for manipulating benchmark interest rates. The U.S. and U.K. are running parallel criminal probes.

Blockbuster Cases

The SFO sought an extra 19 million pounds from the British government last month to pay for “blockbuster” cases including the probe into benchmark manipulation. Its 2013-2014 budget has plunged to 32 million pounds from 52 million pounds in 2008. The prosecutor previously received 3.5 million pounds in 2012 to help fund its Libor probe.

David Green, the SFO’s director, said last year the agency had doubled the number of people working on the investigation to 60 and that they were focusing on British nationals at British banks.

To contact the reporter on this story: Lindsay Fortado in London at lfortado@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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