Four Former Barclays Employees Given Jail Sentences in Libor Case -- Update
July 07 2016 - 12:28PM
Dow Jones News
By Margot Patrick
London--Four former Barclays PLC employees were jailed by a
London court Thursday for attempting to rig global interest rate
benchmarks.
Jay Merchant, 45, a former trader at Barclays in New York,
received a sentence of 6 1/2 years, while Jonathan Mathew, 35, and
Peter Johnson, 61, both former rate submitters in London, received
four-year sentences.
Alex Pabon, a 37-year-old American who worked as a trader at
Barclays in New York, was given a reduced sentence of two years and
nine months, for what the judge described as a lesser role in the
conspiracy.
All four men acted for their own and Barclays's gain by
conspiring to manipulate the London interbank offered rate, or
Libor, Judge Anthony Leonard said at the sentencing Thursday. They
each acted with sophistication and planning in carrying out the
rate manipulation, the judge said, and collectively caused
Barclays's counterparties to lose millions of pounds.
Among the four men, Mr. Merchant bore "the greatest
responsibility for what happened," Judge Leonard said, although the
judge added that he hadn't necessarily come up with the idea to rig
rates. Mr. Merchant shook his head as the judge spoke.
The four men arrived in court in casual clothes, toting duffel
bags and suitcases. Half of their sentences must be spent in
custody, the judge said.
The U.K. Serious Fraud Office, which brought the case, alleged
the four men acted dishonestly by trying to influence Libor, a
benchmark used to set interest rates on trillions of dollars in
securities and loans. Mr. Johnson pleaded guilty to conspiracy to
defraud in October 2014. Mr. Mathew, Mr. Merchant and Mr. Pabon
denied the allegations and defended their actions in a three-month
trial.
A jury earlier this week failed to reach a verdict on two
Barclays traders who were part of the same case, Stylianos
Contogoulas and Ryan Reich. The SFO on Wednesday said it would seek
a retrial of the two men.
The sentencing came just under a year after former UBS Group AG
and Citigroup Inc. trader Tom Hayes received a 14-year jail term
for Libor-rigging. Mr. Hayes's sentence was later reduced to 11
years. Six brokers who allegedly conspired with Mr. Hayes were
acquitted in January in a separate trial.
Judge Leonard said there were "real and significant differences"
between the actions of Mr. Hayes and the four men sentenced
Thursday. However, he said both cases showed how the City had
"become a very different place to work over the years" and that
changes to financial regulation more than a decade ago appeared to
have damaged integrity.
"The jury has characterized your behavior as dishonest, which
you must have known it was," the judge said, addressing the
men.
Banks and other financial firms have paid billions of dollars in
penalties over alleged Libor rigging since a global probe started
several years ago. Barclays paid $450 million to U.S. and U.K.
authorities in 2012 and admitted that traders and managers had
sought to rig the rate.
Write to Margot Patrick at margot.patrick@wsj.com
(END) Dow Jones Newswires
July 07, 2016 12:13 ET (16:13 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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