Your IndustryNov 25 2015

Broker denies Libor fixing

Search supported by
Broker denies Libor fixing

A broker accused of rigging Libor to boost his commission claimed that he was simply trying to appease an aggressive trader, the Old Bailey has heard.

Colin Goodman, 53; Darrell ‘Big Nose’ Read, 50; Danny ‘Sarge’ Wilkinson, 48; James Gilmour, 50; Noel Cryan, 49; and Terry Farr, 44; who worked for some of the world’s biggest brokerage firms, are accused of conspiring to rig Libor with convicted fraudster Tom Hayes, 35.

The brokers were influential in setting the daily estimates which decide the final rate at which Libor would be set. The court heard that Libor is calculated daily based on data from a survey of banks, known as panel banks, each day at 11am, and determines the interest rate on $350trn (£230trn) of securities a year.

The manipulation allowed Tokyo-based trader Hayes to make millions of pounds on currency bets involving the Japanese Yen.

Read, Goodman and Wilkinson were all employed by New Zealand-based firm ICAP, Gilmour and Cryan worked for British company RP Martin, and Farr was employed by Tullett Prebon, another British firm.

Brokers were rewarded by Hayes with extra legitimate deals and various kickbacks and bribes, the court heard.

But giving evidence Read said he had never manipulated the rates, and was simply trying to make it appear his company was doing all it could to help Hayes. Read told the court he would try and make it seem that brokers at ICAP were manipulating Libor for Hayes, by blaming Lloyds if the rate didn’t fix according to Hayes’s demands.

Adding that even the Bank of England was complicit in manipulating Libor rates, he said: “The control banks around the world knew low Libor was going on. The BoE had pulled up Barclays for daring to set its Libors higher than the market. They said: ‘We can’t borrow funds, set Libors lower,’ and Barclays got hauled over the coals for it.

“It’s okay for the BoE to allow manipulation when it suits them, but we are sitting here today because of it.”

The court heard that the six defendants did not benefit directly, but allegedly used their position as ‘middle men’ to help nudge the rate in Hayes’ favour to boost in exchange for financial ‘rewards’.

Farr and Wilkinson, of Essex; Goodman, of Surrey; and Read, of Wellington, New Zealand, each deny two counts of conspiracy to defraud.

Cryan, of Kent; and Gilmour, of Benfleet each deny one charge of conspiracy to defraud.