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Ex-Barclays New York Traders Charged in U.K. Libor Probe

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Former UBS and Citigroup Trader Tom Hayes
The SFO has quadrupled the number of people it has charged over Libor in the last two months from three to 12, as it gears up for the trial of Former UBS AG and Citigroup Inc. trader Tom Hayes, who goes on trial in January. Photographer: Matthew Lloyd/Bloomberg

April 28 (Bloomberg) -- Three former Barclays Plc derivatives traders in New York were charged by U.K. prosecutors with manipulating Libor, becoming the first U.S.-based bankers to be accused in the British probe.

Ryan Reich, Alex Pabon and Jay Merchant were charged with conspiracy to defraud, the Serious Fraud Office said in an e-mailed statement today. The first court hearing for the three men, who are currently in the U.S., is scheduled for May 27 at London’s Westminster Magistrates’ Court.

The charges take the total number of people accused in parallel U.S. and U.K. criminal investigations into manipulation of the London interbank offered rate, or Libor, to 17. Global authorities are investigating whether more than a dozen firms colluded to manipulate the benchmark, and regulators have levied about $6 billion in fines to date.

Reich “is not guilty of this offense and will vigorously contest these allegations at his forthcoming trial,” his lawyer said in a statement.

Merchant’s lawyer, Brian Spiro, said his client would be “vindicated and that it will be shown that he acted at all times in a right and proper manner.” Pabon’s lawyer declined to comment.

The men are being prosecuted in connection with suspected rigging of U.S. dollar Libor, two people with knowledge of the situation said in February.

Other Traders

Three other former Barclays traders, Peter Charles Johnson, Jonathan James Mathew and Stylianos Contogoulas, were charged over U.S. dollar Libor-rigging in the U.K. in February. The three conspired with “other employees of Barclays Plc and its associated entities” to defraud with intent to “prejudice the economic interests of others,” prosecutors said in court documents. Their next court hearing is planned for July.

The SFO has quadrupled the number of people it has charged over Libor in the last two months from three to 12, as it gears up for the case against Tom Hayes, a former UBS AG and Citigroup Inc. trader, who goes on trial in January.

A second trial for RP Martin Holdings Ltd. brokers James Gilmour and Terry Farr is scheduled for September 2015. The trio have been accused, along with three ex-ICAP Plc brokers, of manipulating Japanese yen Libor.

The U.K. Financial Conduct Authority has also issued nine warning notices to individuals regarding civil fines in relation to Libor and its euro counterpart, Euribor.

To contact the reporter on this story: Suzi Ring in London at sring5@bloomberg.net

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

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