UPDATE 3-UK prosecutor charges US-based ex-Barclays staff in Libor probe
12:42pm EDT
* Hearing set in London court for May 27
* Ryan Reich, Jay Merchant's lawyers say clients refute allegations
* Sixteen charged so far in global Libor investigation (Adds comment from Jay Merchant's lawyer)
By Kirstin Ridley
http://www.reuters.com/article/2014/04/28/bar...4A20140428
LONDON, April 28 (Reuters) - Britain on Monday filed its first criminal charges against U.S.-based Libor traders, as the UK arm of a complex global investigation into alleged benchmark interest-rate rigging stretches across the Atlantic.
The Serious Fraud Office (SFO) charged three former traders at British bank Barclays - director of dollar fixed-income swaps Jay Merchant and dollar interest rate derivative traders Alex Pabon and Ryan Reich - with conspiracy to defraud in connection with its Libor inquiry.
A provisional hearing has been scheduled for the three men, who the SFO confirmed were currently in the United States, at Westminster Magistrates Court in London on May 27.
Lawyers for Reich and Merchant, Ben Rose of Hickman and Rose and Brian Spiro of BCL Burton Copeland, respectively, said their clients refuted any allegations of wrongdoing.
"He (Reich) is not guilty of this offence and will vigorously contest these allegations at his forthcoming trial," Reich's lawyer said in an emailed statement.
Merchant's lawyer said: "Should this matter proceed, he (Jay Merchant) has no doubt that he will be fully vindicated and it will be shown that he acted at all times in a right and proper manner."
Pabon's London lawyer was not immediately available for comment.
The charges could prompt the first extradition to Britain from the U.S. in the lengthy investigation into the alleged rigging of Libor (London interbank offered rate), a central cog in the global financial system.
The SFO, which has now charged 12 in connection with its criminal Libor investigation, declined to comment on any extradition request or give further details about the charges.
The investigation into benchmark interest rates has been overshadowed by a parallel inquiry into allegations of foreign-exchange market rigging, which on March 5 reached into the heart of London's financial establishment when the Bank of England suspended a staff member.
However, the inquiry into alleged fixing of Libor and related Euribor rates, against which around $450 trillion of financial contracts from derivatives to consumer loans are priced, has so far seen U.S. and European authorities fine 10 banks and brokerages $6 billion and charge 16 men.
The SFO in February charged three former London-based Barclays Libor submitters - Peter Johnson, Jonathan Mathew and Stylianos Contogoulas - over a two-year scheme to rig rates and in March charged three former ICAP brokers with fraud-related Libor offences.
SETTLEMENT
Barclays was the first bank to settle U.S. and UK regulatory allegations of rate manipulation, paying around $450 million in fines in 2012. But even regulators admitted privately they were taken aback by an ensuing public and political backlash, which forced out four top Barclays directors, sparked a fraud squad probe and several parliamentary reviews.
In their case to date against former London-based Barclays traders already charged, SFO lawyers have said they have sifted through "vast amounts" of documents, adding that much of the evidence against Johnson, Mathew and Contogoulas was in email form.
The three men, who are next expected to appear in court towards the end of July, are the first to face charges for the alleged manipulation of the U.S. dollar-denominated Libor rate. Ten other men face U.S. and UK criminal charges for manipulating yen-denominated Libor.
The SFO has already charged three other men as part of its Libor investigation, including Tom Hayes, a former yen derivatives trader at UBS and Citigroup, who pleaded not guilty in December.
Hayes is due to stand trial in January 2015 on eight charges of conspiring with staff from at least 10 major banks and brokerages to manipulate yen Libor rates between 2006 and 2010.
Terry Farr and James Gilmour, two brokers from RP Martin, have been charged and pleaded not guilty to similar fraud-related offences. Their trial has been scheduled for September 2015, in part to allow the SFO time to bring charges against further alleged co-conspirators. (Editing by Erica Billingham)
http://www.reuters.com/article/2014/04/28/bar...4A20140428
12:42pm EDT
* Hearing set in London court for May 27
* Ryan Reich, Jay Merchant's lawyers say clients refute allegations
* Sixteen charged so far in global Libor investigation (Adds comment from Jay Merchant's lawyer)
By Kirstin Ridley
http://www.reuters.com/article/2014/04/28/bar...4A20140428
LONDON, April 28 (Reuters) - Britain on Monday filed its first criminal charges against U.S.-based Libor traders, as the UK arm of a complex global investigation into alleged benchmark interest-rate rigging stretches across the Atlantic.
The Serious Fraud Office (SFO) charged three former traders at British bank Barclays - director of dollar fixed-income swaps Jay Merchant and dollar interest rate derivative traders Alex Pabon and Ryan Reich - with conspiracy to defraud in connection with its Libor inquiry.
A provisional hearing has been scheduled for the three men, who the SFO confirmed were currently in the United States, at Westminster Magistrates Court in London on May 27.
Lawyers for Reich and Merchant, Ben Rose of Hickman and Rose and Brian Spiro of BCL Burton Copeland, respectively, said their clients refuted any allegations of wrongdoing.
"He (Reich) is not guilty of this offence and will vigorously contest these allegations at his forthcoming trial," Reich's lawyer said in an emailed statement.
Merchant's lawyer said: "Should this matter proceed, he (Jay Merchant) has no doubt that he will be fully vindicated and it will be shown that he acted at all times in a right and proper manner."
Pabon's London lawyer was not immediately available for comment.
The charges could prompt the first extradition to Britain from the U.S. in the lengthy investigation into the alleged rigging of Libor (London interbank offered rate), a central cog in the global financial system.
The SFO, which has now charged 12 in connection with its criminal Libor investigation, declined to comment on any extradition request or give further details about the charges.
The investigation into benchmark interest rates has been overshadowed by a parallel inquiry into allegations of foreign-exchange market rigging, which on March 5 reached into the heart of London's financial establishment when the Bank of England suspended a staff member.
However, the inquiry into alleged fixing of Libor and related Euribor rates, against which around $450 trillion of financial contracts from derivatives to consumer loans are priced, has so far seen U.S. and European authorities fine 10 banks and brokerages $6 billion and charge 16 men.
The SFO in February charged three former London-based Barclays Libor submitters - Peter Johnson, Jonathan Mathew and Stylianos Contogoulas - over a two-year scheme to rig rates and in March charged three former ICAP brokers with fraud-related Libor offences.
SETTLEMENT
Barclays was the first bank to settle U.S. and UK regulatory allegations of rate manipulation, paying around $450 million in fines in 2012. But even regulators admitted privately they were taken aback by an ensuing public and political backlash, which forced out four top Barclays directors, sparked a fraud squad probe and several parliamentary reviews.
In their case to date against former London-based Barclays traders already charged, SFO lawyers have said they have sifted through "vast amounts" of documents, adding that much of the evidence against Johnson, Mathew and Contogoulas was in email form.
The three men, who are next expected to appear in court towards the end of July, are the first to face charges for the alleged manipulation of the U.S. dollar-denominated Libor rate. Ten other men face U.S. and UK criminal charges for manipulating yen-denominated Libor.
The SFO has already charged three other men as part of its Libor investigation, including Tom Hayes, a former yen derivatives trader at UBS and Citigroup, who pleaded not guilty in December.
Hayes is due to stand trial in January 2015 on eight charges of conspiring with staff from at least 10 major banks and brokerages to manipulate yen Libor rates between 2006 and 2010.
Terry Farr and James Gilmour, two brokers from RP Martin, have been charged and pleaded not guilty to similar fraud-related offences. Their trial has been scheduled for September 2015, in part to allow the SFO time to bring charges against further alleged co-conspirators. (Editing by Erica Billingham)
http://www.reuters.com/article/2014/04/28/bar...4A20140428
