Libor Brokers Are Players in `Show Trial,' Defense Lawyer Says

  • Men are scapegoats for broken financial system, lawyer says
  • Darrell Read's lawyer gives closing statement at London Trial

The six interdealer brokers accused of helping Tom Hayes rig Libor are scapegoats for a broken financial system where everyone set Libor to suit their trading positions, a lawyer for one defendant told jurors Thursday.

Both senior management and the highest levels of the British establishment knew about Libor rigging, Henry Blaxland, the lawyer for ex-ICAP Plc broker Darrell Read, said during closing arguments. The men were victims of an elaborate "show trial" that is both unfair and unjust, he said.

The whole investigation had proceeded on the basis that "the system worked fine and manipulation was the fault of a few bad apples," Blaxland said. “The manipulation of Libor was endemic."

"Don’t use this as an opportunity to express disapproval of the banking system in general and brokers in particular," Blaxland urged.

Blaxland’s address, which included references to Winston Churchill and the complicity of the Bank of England, comes at the tail-end of a sprawling three-month long trial. His client, the 50-year-old Read, is accused of leaning on colleague and friend Colin Goodman -- nicknamed Lord Libor -- to skew a daily prediction e-mail focused on the interest rate to boost Hayes’s vast trading positions.

Read, whose only client at one stage was Hayes, was at the mercy of a "strange and obsessive man" who was so important to ICAP that Read risked being sacked if he didn’t offer to help him, Blaxland said.

In reality, he only told Hayes he would help him as part of a ruse in which all his colleagues at the world’s biggest interdealer broker were in on. Dozens of messages and texts where Read appears to ask Goodman to change specific Libor figures were simply information sharing.

Read and the five other British men, from Tullett Prebon Plc and RP Martin Holdings Ltd. as well as ICAP, are accused of helping Hayes nudge the yen variant of the London interbank offered rate up and down almost daily by deceiving banking clients about the state of the market, or leaning on them for favors. In exchange they were collectively paid hundreds of thousands of pounds in kickbacks, prosecutors claim.

Representatives for each of the men will get the chance to lay out their arguments before the judge sums up the case for jurors, most likely late next week.

Goodman’s lawyer, Philip Hackett, fumbled the start of his closing remarks, claiming the case against his client was based on less than 1 percent of the prediction e-mails he sent out. It was, the judge corrected him, closer to 10 percent.

Hayes was a derivatives trader at UBS Group AG and Citigroup Inc. who made more than $300 million for his employers between 2006 and 2010. He was convicted and sentenced to 14 years in jail in August 2015 for masterminding a campaign to rig Libor. The sentence was cut to 11 years after an appeal.

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