- Three traders sued bank citing law protecting whistle-blowers
- Barclays stopped paying legal fees a month after U.K. charges
Barclays Plc must pay legal fees for three former traders charged in the U.K. with manipulating the Libor after a U.S. judge rejected the bank’s request to toss the suit because the trio had failed to show evidence of retaliation.
Alex Pabon, Jay Merchant and Ryan Reich were the first U.S.-based bankers to face prosecution in the Serious Fraud Office’s investigation into the manipulation of the London interbank offered rate. The traders sued in a U.S. court claiming the bank is obligated to pay their legal fees under a law protecting whistle-blowers. U.S. District Judge Lewis Kaplan in Manhattan ruled Wednesday there wasn’t enough evidence to dismiss the case.
The former traders were charged in April 2014 with conspiring with three other Barclays employees in London, from June 2005 to September 2007, to rig the interest-rate benchmark. They said they cooperated in U.K. and U.S. probes into the illegal manipulation of the benchmark Libor.
While the traders said they’d acted in Barclays’s interest, they alleged that the bank retaliated against them in May 2014 by discontinuing to pay their legal fees even though it had done so during the regulatory proceedings.
Mark Lane, a spokesman for Barclays, had no immediate comment on the judge’s decision.
The case is Pabon v. Barclays Bank Plc, 14-cv-07897, U.S. District Court, Southern District of New York (Manhattan).