Barclays' Bagguley Says Traders Had No Right to Influence Libor

The chief operating officer of Barclays Plc’s investment bank told a London court he never instructed swaps traders to speak to Libor submitters and didn’t know about any contact between them.

Appearing as a witness at the London trial of two former traders accused of rigging the benchmark rate, Mike Bagguley said he didn’t think a swaps trader had any "responsibility or any right, as it were, to have a say in what" a Libor submission should be. He said he didn’t encourage contact between the swaps desk and cash desk, the unit responsible for setting Libor.

Ex-Barclays traders Stylianos Contogoulas and Ryan Reich are charged with conspiring to rig the U.S. dollar version of the London interbank offered rate, or Libor, a key benchmark interest-rate tied to securities such as mortgages. The 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.

Prosecutors claim Contogoulas, 45, and Reich, 35, pushed for dishonest rates to benefit their trading profits from 2005 to 2007. Lawyers for the pair say they didn’t hide their actions and didn’t think they were doing anything wrong.

Under cross-examination by Reich’s lawyer, Adrian Darbishire, Bagguley faced questions about an email he was copied on where a swaps trader told another trader that "we influence our settings based on the fixings we all have." Bagguley denied this was a reference to Libor-rigging.