Barclays libor duo let profits Trump honesty - prosecutor | Fin24
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Barclays libor duo let profits Trump honesty - prosecutor

Mar 02 2017 19:06
Bloomberg: Jeremy Hodges and Suzi Ring

Two former Barclays traders charged with rigging a key interest-rate benchmark readily abandoned honesty and integrity in the pursuit of illegal profits, prosecutors said on the first day of a London trial.

Stylianos Contogoulas, 45, and Ryan Reich, 35, who were based on the London and New York trading desks at Barclays, are charged with conspiring to manipulate the US dollar London interbank offered rate, or Libor, from 2005 to 2007.

They "dishonestly agreed to procure or make submissions of rates by Barclays" to create an advantage to the trading positions of the bank’s employees, according to a copy of the indictment.

"Honesty and integrity were matters that were entirely expendable," Emma Deacon, a prosecutor for the Serious Fraud Office, said on Tuesday. "Their singular goal was to make more profit on their trading."

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. Deacon said this was a "simple case" and they don’t need to be financial experts to understand it.

"As a fraud, you may think in essence it’s actually quite simple. Essentially, it’s cheating," Deacon said. Traders and submitters would "nudge the rate this way and that to suit their trading positions on particular dates, to their financial gain and to the financial detriment of the counterparties to the deals."

Contogoulas and Reich, who are Greek and American respectively, have pleaded not guilty.

Deacon said that two other former Barclay’s employees, Peter Johnson and Jonathan Mathew, who were responsible for submitting Libor rates, have been convicted of manipulating Libor.

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