Libor Convictions at Risk as SFO Expert Witness Challenged

  • Rowe has testified for the prosecution at four Libor trials
  • Two convicted traders are considering fresh appeals bids

Tom Hayes and another man convicted of manipulating Libor are considering appeals after learning that an expert prosecution witness said at another rigging trial that he needed help understanding some of the very practices he testified about.

Midway through the retrial of former Barclays Plc traders Ryan Reich and Stylianos Contogoulas, Reich’s lawyer challenged witness Saul Haydon Rowe’s credibility, saying he had passed off other people’s knowledge as his own. Rowe acknowledged that during the men’s first trial he had texted friends while testifying for help understanding some of the terms.

Stylianos Contogoulas, a former Barclays Plc Libor trader, is seen arriving at Southwark Crown Court to faces charges in connection with the manipulation of the London interbank offered rate, or Libor, in London, U.K., on Monday, March 3, 2014. Prosecutors and regulators around the world are investigating whether more than a dozen firms colluded to rig the interest rate benchmark and have issued fines of about $6 billion against financial institutions. Photographer: Jason Alden/Bloomberg *** Local Caption *** Stylianos Contogoulas

Former Barclays Plc traders Ryan Reich and Stylianos Contogoulas.

Photographer: Jason Alden/Bloomberg

“You have misrepresented your expertise to the SFO and to the juries,” Reich’s lawyer, Adrian Darbishire, said to Rowe last month, referring to the Serious Fraud Office, which prosecuted the case. “I suggest you have failed to comply with your basic duties of disclosure, and that you have concealed, rather than revealed, the sources of statements which you have presented as your own opinion.”

The SFO has an uneven record in prosecuting individuals for manipulating Libor, a key benchmark used to value trillions of dollars worth of financial products. Since securing an 11-year sentence against Hayes for manipulating the London interbank offered rate, it’s sent at least four more to jail, including Reich and Contogoulas’s co-defendants in their first trial last summer. But six brokers accused of conspiring with Hayes were acquitted in January 2016.

Click here for more on the SFO’s Libor conviction rate

Rowe, a former trader himself who works for Turing Experts Ltd., denied that he misled the SFO and jurors about his expertise, though he did acknowledge texting traders he knew for help on some terms while on the witness stand. He’s testified for the SFO at four Libor-related trials, including against Hayes and the former Barclays traders.

Hayes said in a statement Thursday that the disclosures about Rowe will be added to his case-review application, arguing “that the Serious Fraud Office were aware of the limits of his expertise.”

A spokesman for Turing said the company is conducting an internal investigation. A spokeswoman for the SFO declined to comment.

Jonathan Mathew, one of the former Barclays traders convicted at Reich and Contogoulas’s first trial, is also considering whether to revive an appeal as a result of Rowe’s testimony, his lawyers said. Mathew was sentenced to four years in jail.

“We always felt that the ultimate verdict of his jury was wrong,” Matthew Frankland, Mathew’s lawyer, said in an email. “Like Mr. Mathew, the Crown’s own expert also did not understand the process.”

In addition to testifying, Rowe wrote “Libor and Interest Rate Markets, Products, Concept and Terminology” for the SFO, which used the report in all four of the Libor-related trials it’s prosecuted. Rowe is the sole author. He said during the trial that he’s been a full-time consultant and expert witness since 2008 and has testified in about 50 disputes, primarily in civil cases.

Judge Anthony Leonard told jurors this week that they had to decide if Rowe had “sufficient expertise” to testify and if they weren’t convinced, they should “disregard it.” They returned with acquittals after four hours.

    Before it's here, it's on the Bloomberg Terminal.