By Steve Slater
LONDON Feb 17 Britain's fraud agency started
criminal proceedings against three former bankers at Britain's
Barclays Plc on Monday for the alleged manipulation of
Libor interest rates.
The Serious Fraud Office (SFO) said it has charged Peter
Charles Johnson, Jonathan James Mathew and Stylianos Contogoulas
with conspiracy to defraud between June 2005 and August 2007.
The SFO last year brought charges against three former
employees of Swiss bank UBS and UK brokerage RP
Martin, the first people to face trial in connection with a
global investigation into a rate-rigging scandal that sparked
intense criticism of standards across the industry.
Barclays paid $450 million in July 2012 to settle
allegations from U.S. and UK regulators that it had manipulated
Libor interest rates, prompting the resignations of its chairman
and chief executive and a barrage of criticism about standards
Libor rates, designed to reflect the wholesale cost of
loans, are used to help to price hundreds of trillions of
dollars worth of financial products worldwide, ranging from
derivatives to mortgages.
Johnson was a U.S. dollar Libor-submitter in London. The
Financial Times said Mathew reported to Johnson and signed a
non-prosecution agreement with the U.S. Department of Justice in
2012 before Barclays' settlement, whereby he agrees to
co-operate and avoids any criminal charge.
Until now investigations have centered on alleged rigging of
Barclays declined to comment on Monday.
All three men are listed as "inactive" on the UK financial
regulator's register of regulated staff. It showed Johnson left
Barclays on Sept. 27, 2012 and Mathew left a day later.
Contogoulas left Barclays in April 2006 and joined Merrill
Lynch three months later as a rates trader. Merrill was not one
of the banks that submitted prices used to set Libor prices. It
was taken over by Bank of America and Contogoulas left
the bank in September 2011, the register shows.
Bank of America declined to comment.
Eight banks and RP Martin have paid penalties of almost $6
billion for the alleged manipulation of Libor and its euro
UBS, Royal Bank of Scotland and Rabobank have paid
bigger settlements than Barclays over Libor, and more banks are
expected to face fines as regulators in the United States and
Britain continue to investigate.
The SFO's investigation into Libor began in July 2012 and it
said it continues to work with Britain's Financial Conduct
Authority and the U.S. Department of Justice on the case.
It said the former Barclays staff would appear at
Westminster Magistrates' Court at a future date.
The SFO is under pressure after a series of high-profile
setbacks, and its boss David Green has staked his reputation on
the success of high-profile investigations such as Libor.
It brought charges in relation to alleged Libor rigging
against Tom Hayes, a former trader at UBS and Citigroup, last
June and started proceedings against Terry Farr and James
Gilmour, former brokers at RP Martin, last July.
The three men pleaded not guilty in December. Hayes' trial
is expected to start in January 2015.
Regulators are also now investigating how other benchmarks
are set, such as in foreign exchange and commodities markets.