Ex-SocGen Trader Eludes Arrest Warrant in U.K. Euribor Case

Updated on
  • U.K. prosecutors tried to force Esper to appear in London case
  • Paris court rejects warrant, saying conduct occurred in France

Former Societe Generale SA trader Stephane Esper won a French court ruling blocking a request by U.K. prosecutors to extradite him to face charges for rigging a key interest-rate benchmark.

The Paris appeals court on Wednesday rejected the arrest warrant, ruling that the alleged conduct, which took place in France, wasn’t outlawed in the country when it occurred a decade ago. French prosecutors said they wouldn’t appeal the decision on behalf of the U.K.’s Serious Fraud Office.

“It isn’t disputed that the entirety of the facts would have taken place on French territory by Stephane Esper, who is of French nationality,” the court said in the ruling. French law states “that the carrying out of a European arrest warrant can be rejected if all or part of the conduct for which it was issued took place on the French territory.”

The SFO in November 2015 charged 11 traders who worked at Deutsche Bank AG, Barclays Plc and Societe Generale for allegedly conspiring to “procure or make submissions” that attempted to manipulate the euro interbank offered rate between 2005 and 2009. Euribor rigging was investigated as part of a wider probe into benchmark rates, the most famous of which was Libor, a counterpart of Euribor.

Six of the 11 traders plead not guilty this month and are scheduled to stand trial in London in September.

Societe Generale representatives declined to comment. The SFO said it hadn’t seen the full ruling, but was considering its “next steps.” French prosecutors, who would have to bring any appeal, said they had opposed the initial request for the warrant in court submissions.

Esper’s attorney, Francois de Castro, said the decision showed that the U.K. case is “baseless.”

“What he’s accused of took place in France at a time when such acts weren’t outlawed,” de Castro said. “The British authorities must now draw conclusions from this decision.”

Four Deutsche Bank traders in Germany are also fighting the European Arrest Warrants issued by U.K. prosecutors in the case. The warrants are typically valid throughout the 28-nation European Union, but suspects can challenge them in their home countries over jurisdiction and double jeopardy issues.

JPMorgan Chase & Co., HSBC Holdings Plc and Credit Agricole SA were fined a total of 485.5 million euros ($512 million) in December by European Union antitrust regulators for rigging the Euribor benchmark, following a five-year investigation into the scandal. The three had refused to join a multi-bank settlement in 2013 with four other lenders including Deutsche Bank and Societe Generale.

JPMorgan, HSBC and Credit Agricole dispute the EU probe’s findings and formally challenged the fines at the Luxembourg-based EU General Court. The European Commission said it “will defend its decision in court.”

— With assistance by Fabio Benedetti Valentini

(Adds details on EU case in last paragraph.)
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