Constituting a major blow to the Serious Fraud Office, a UK jury has acquitted six City brokers who were alleged to have helped manipulate the London interbank offered rate (Libor), just months after the high profile conviction of former banker Tom Hayes.
The men – former ICAP traders Colin Goodman, Daniel Wilkinson and Darrell Read, former RP Martin brokers James Gilmour and Terry Farr; and former Tullett Prebon broker Noel Cryan – were accused of conspiring with former UBS and Citigroup trader Hayes to rig a key lending rate used between banks for rewards such as takeaway curries and drinks.
While Goodman, Wilkinson, Gilmour, Farr and Cryan were all found not guilty on all charges yesterday (27 January), the jury took longer to deliberate on Read’s verdict, but reached a not guilty verdict today.
Hayes, a former UBS and Citigroup yen derivatives trader, was found guilty of manipulating the Libor in August. Having been dubbed the ringmaster of a cartel of traders that made millions from rigging financial markets by prosecutors, Hayes argued he was transparent about attempting to influence rates and management were aware. But a jury rejected his defence at Southwark Crown Court in south London and he was sentenced to 14 years in prison, later reduced to 11 years, marking a victory for the SFO.
This latest result in the ongoing Libor rigging saga is a major defeat to the agency however, which just last month asked for an additional £21.1m to bankroll its ongoing cases through to the end of the financial year. With the agency’s director David Green QC pushing the agency towards building a portfolio of complex cases, opinion is divided amongst City lawyers as to whether the agency has the skills and resources to humble major banks. Its continued existence was called into question at the end of 2014 by Home Secretary Theresa May.
On the verdict, Byrne and Partners partner Matthew Frankland, who represented Wilkinson, said: ‘We believe the jury’s decision further underlines that the Libor system was broken well before this indictment period, both in terms of banks submissions and the British Bankers Association. Indeed, the evidence of John Ewan was likened to consulting a clairvoyant, and Wilkinson’s statement that the BBA was about as useful in policing Libor as a chocolate tea pot seems vindicated.’
‘Ultimately, there is a hypocrisy in charging brokers. Brokers do not work for banks, they play no part in the Libor submission process and are not and never were regulated by the BBA in relation to their Libor predictions.’
Frankland added: ‘The case also further highlights that yet again, most of the individuals prosecuted in the Libor cases are relatively junior within the different organisations, with more senior people not being held to account.’
For more on the SFO, see: A step backwards’: Home Secretary weighs in on SFO’s future with proposal to abolish