ICAP, Tullett Staff Head to Court as Libor Gaze Turns to BrokersLiam Vaughan
Six former employees from some of the world’s biggest interdealer brokerage firms will enter a London court room this week to stand trial for participating in a conspiracy to rig Libor.
Darrell Read, Colin Goodman and Danny Wilkinson from ICAP Plc; Terry Farr and James Gilmour from RP Martin Group Ltd; and Noel Cryan from Tullett Prebon Plc are accused of helping traders manipulate the London interbank offered rate by attempting to procure “favorable submissions” from other rate-setting banks on the traders’ behalf.
In doing so they “deliberately disregarded the proper basis for the submission of those rates, thereby intending to prejudice the economic interests of others,” prosecutors at the U.K. Serious Fraud Office claim in the indictment. The six men have pleaded not guilty to the charges.
The case follows the conviction in August of former UBS Group AG and Citigroup Inc. trader Tom Hayes, the only person to face trial since investigations began more than seven years ago. He is currently appealing the verdict and a 14-year prison sentence.
The fate of the six men will be in the hands of 12 jurors, who will have to wade through an anticipated three months of testimony from witnesses and arguments from attorneys on both sides before deciding on a verdict.
Libor, which is used to determine interest rates in $350 trillion of securities from mortgages and loans to swaps, is based on a survey of banks each day at 11 a.m. in London. Interdealer brokers are the middle-men in financial markets, lining up buyers and sellers for a small commission on every trade.
While brokers don’t contribute to the rate or benefit directly from its movements, the defendants are accused of using their positions at the center of the market to influence the benchmark.
The broker trial will be heard by Justice Nicholas Hamblen, a former barrister specializing in insurance and shipping cases. It will take place at Southwark Crown Court, where ex-UBS trader Kweku Adoboli was sentenced in 2012 to seven years in prison in an unrelated fraud involving a $2.3 billion loss at the Swiss bank.