The UK filed its first criminal proceedings against scandal-struck US-based Libor traders on Monday over the alleged rigging of global benchmark interest rates. Three former Barclays traders are to be charged, according to the UK’s Serious Fraud Office.
Jay Vijay Merchant, Alex Julian Pabon and Ryan Michael Reich are the three former New-York based Barclays employees who have been charged by the Serious Fraud Office (SFO) with conspiracy to defraud.
“He is not guilty of this offense and will vigorously contest
these allegations at his forthcoming trial,” British law
firm Hickman & Rose, which is representing Reich, said in a
statement. The lawyers for the remaining two men were not
available for comment, reported Reuters.
While the SFO confirmed that the trio are in the US, they are due
to appear at Westminster Magistrates Court in London on May 27.
The occasion could set the ball rolling for the first extradition
to the UK from the US in what has been a lengthy investigation
into Libor (London interbank offered rate) manipulation.
The Libor scandal dates back to 2005. Libor is the average
interest rate that underpins trillions of dollars worth of loans,
contracts and mortgages through the interest rates of major
London banks. The scandal drew in some of the world’s biggest
financial institutions, including the Royal Bank of Scotland,
UBS, and Barclays.
Barclays was the first bank to settle in the wake of the rate
manipulation accusations, paying some $450 million in fines in
2012 after admitting misconduct.
The subsequent backlash forced out four top Barclays directors,
including chief executive Bob Diamond in 2012, who had previously
insisted that he would not resign.
So far, US and European authorities have fined 10 banks and
brokerages a total of $6 billion.
Twelve people are now facing criminal charges in the US and UK,
among them the three from Barclays for the manipulation of
denominated Libor. Twenty-two potential co-conspirators have also
been identified, but not publicly named.
The charges fall at a time when a parallel investigation is
underway into foreign exchange market rigging. On March 5, the
Bank of England was forced to suspend a member of staff.