LONDON Three former brokers at ICAP (IAP.L), the world's largest interdealer broker, appeared in a London court on Tuesday charged with running a four-year scheme to manipulate Libor benchmark interest rates.
The men, who spoke only to confirm personal details such as addresses, bring to nine the number of people facing criminal charges in Britain over allegations they rigged the London Interbank Offered Rate (Libor), which is used to price about $450 trillion of products from complex derivatives to home loans.
The hearing at Westminster Magistrates' Court is the latest in an investigation that stretches from North America to Asia, shaking public faith in the financial industry. The scandal has so far led to fines of $6 billion imposed on 10 banks and ICAP.
Traders are alleged to have fixed Libor, which is based on a survey of what banks would charge each other for loans, by submitting answers that could nudge the reported rates by amounts that were tiny, but translated into big profits.
Former ICAP derivatives broker Darrell Paul Read, 49, his supervisor Daniel Martin Wilkinson, 47, and 52-year-old Colin John Goodman, a cash broker, are all charged with conspiracy to defraud between August 2006 and September 2010.
Britain's Serious Fraud Office (SFO), which brought the charges last month, alleges the three men conspired with Tom Hayes, a former yen derivatives trader who has already been charged with eight counts of conspiracy to defraud and is due to stand trial in January 2015, while he was working at UBS UBSN.VX in Tokyo between 2006 and 2009.
They dishonestly agreed to procure or make submissions of yen Libor rates that were false or misleading and were intended to benefit Hayes' trading, the SFO said in documents outlining the charges.
Goodman and Read continued to work with Hayes in the scheme when the trader moved to Citigroup (C.N) in 2010, the documents say.
The trio, who like Hayes have also been charged by U.S. prosecutors, did not indicate any plea and have been granted conditional bail. They will next appear at the higher Southwark Crown Court on April 30 for a case management hearing.
These new charges appear to reduce the chances of the U.S. Justice Department prosecuting the same brokers, since countries do not usually extradite defendants if they face similar charges at home.
The Justice Department has charged eight men for their roles in manipulating the Libor rate, but all remain overseas.
Justice Department spokesman Peter Carr declined to comment on what impact the SFO's most recent charges would have on the pending DoJ cases.
"We have a good, productive relationship with the UK Serious Fraud Office and other partners throughout the globe," Carr said. "We coordinate in a way that makes sense for law enforcement, while respecting the fact that we are separate entities with our own mandates."
SFO head David Green told Reuters last year that it was understood British suspects would be tried in Britain rather than extradited to the United States.
Hayes will also appear at the April 30 hearing, as will former RP Martin brokers Terry Farr and James Gilmour, who face charges for similar offences. All three have pleaded not guilty.
Farr and Gilmour's trial is planned for September 2015, in part to allow the SFO time to bring charges against further alleged co-conspirators.
The SFO, eager to silence critics which have questioned its ability to secure convictions for complex financial crimes, has also charged three other men, former Barclays (BARC.L) traders Peter Charles Johnson, 59, Jonathan Mathew, 33, and Stylianos Contogoulas, 42, who are alleged to have manipulated dollar Libor rates to boost the trading positions of Barclays staff.
They are due to appear at Southwark Crown Court in July.
ICAP, which in September settled regulatory investigations into allegations of manipulation of yen Libor, declined to comment.
(Additional reporting by Aruna Viswanatha in Washington DC. Editing by David Goodman and Mark Potter)