Barclays Manager Dearlove Said to Be Questioned by SFO on Libor

  • Mark Dearlove interviewed by U.K. Serious Fraud Office
  • SFO investigating whether Barclays low-balled Libor rates

U.K. prosecutors interviewed Barclays Plc’s Japan head Mark Dearlove as part of its investigation into Libor rigging, in a sign that more senior executives are coming under scrutiny in the global probe.

The Serious Fraud Office questioned Dearlove in recent weeks, according to two people with knowledge of the situation who didn’t want to be identified because the interview was private. The agency is investigating whether Barclays lowballed its Libor submissions to make the bank’s balance sheet appear healthier during the 2008 financial crisis.

The investigation is the third branch of the SFO’s Libor probe, which has also looked at the manipulation of London interbank offered rate submissions in yen and dollars. The SFO signaled its intention to question senior executives over lowballing at a separate Libor trial in London last year. Five men have been convicted in the U.K. over Libor rigging with more than a dozen others facing related charges.

The Financial Times reported the interview earlier on Thursday.

The question of what Barclays executives knew about lowballing isn’t new. When Graiseley Properties Ltd. sued the bank to cancel an interest-rate swap deal linked to Libor, in a case that was settled in 2014, it presented transcripts to the court of conversations between bank executives, including Dearlove, suggesting they were aware of the behavior. Judge Julian Flaux said in 2014 that Dearlove “accepts that he was involved in and aware of manipulation of Libor" and had “explained in his witness statement how it came about.”

Court documents in that case also showed Dearlove reported his concerns about Libor to compliance officers, the head of the legal department and other senior managers.

Barclays was fined 290 million pounds ($359 million) in 2012 for rigging Libor, a benchmark interest rate that is used to value more than $300 trillion of securities worldwide.

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