Ex-Barclays Trader Sought Libor Rate Fix `Absolutely Openly'

Updated on
  • Contogoulas accused of Libor manipulation in criminal trial
  • He had no reason to think he was doing anything wrong: lawyer

A former Barclays Plc trader charged with rigging a key interest-rate benchmark wasn’t involved in any subterfuge and did everything in the open, his lawyer told jurors.

Stylianos Contogoulas sent emails and messages to Libor submitters requesting a preferred rate “absolutely openly,” John Ryder, his lawyer, said at the trial Monday in London.

The 45-year-old Contogoulas has always maintained that he sent them, didn’t believe it was wrong and had absolutely no reason to believe it was wrong, Ryder said.

Contogoulas and colleague Ryan Reich, 35, who were on the London and New York swaps trading desks at Barclays, are charged with conspiring to manipulate the U.S. dollar London interbank offered rate, or Libor, from 2005 to 2007. The two men "dishonestly agreed to procure or make submissions of rates by Barclays" to create an advantage to the trading positions of the bank’s employees, prosecutors said in the indictment.

"There was no subterfuge, there was no effort in some way of concealing or deceiving," Ryder said. He was "totally open at all stages," and no one at Barclays -- from his bosses to compliance -- "ever said a word about it."

The Libor dollar rate was determined by a panel of 16 banks asked in a daily poll to estimate how much it would cost them to borrow from each other for different periods. The rate is tied to a variety of financial products, including loans and mortgages. Contogoulas and Reich have pleaded not guilty.

Junior trader

Reich, who joined Barclays as a junior trader two years after graduating from Princeton University, wouldn’t have been "on the lookout for anyone around him involved in fraud" during the first days of his job, Adrian Darbishire, his lawyer, said.

Every aspect of how Reich operated as a trader is "characterized by openness," he said. "And openness and dishonesty don’t go hand-in-hand." Reich " is by any standard a man of real integrity and honesty," Darbishire said.

Contogoulas has a computing degree from Imperial College, London and an MBA from Manchester Business School. He joined Barclays in October 2001 on the U.S. dollar fixed income swaps desk before moving to Merrill Lynch in July 2006. Prior to joining Barclays Reich worked at Citigroup as an analyst in New York.