Regulation  

Six Libor accused found not guilty

Six Libor accused found not guilty

A sixth broker on trial over allegations he acted as a middleman for convicted trader Tom Hayes and others to fix global bank rates has been cleared on the remaining charge against him.

According to FTAdviser’s parent newspaper the Financial Times, Darrell Read, a former broker at ICAP, joined five others from the firm, Tullett Prebon and RP Martin in being found not guilty of Libor manipulation.

They had faced five counts of fraud from the Serious Fraud Office, which alleged that they helped Hayes to manipulate the London interbank offered rate tied to the Japanese yen while he worked for UBS and Citigroup.

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Hayes was found guilty last August of eight counts of conspiracy to defraud, having sought to fix the rate to benefit his own trading positions, which were tied to yen/Libor.

Along with Mr Read, nicknamed “Big Nose”, Danny Wilkinson and Colin Goodman, or “Lord Libor”, worked at ICAP, while Noel Cryan was at Tullett Prebon and Jim Gilmour and Terry Farr were formerly with RP Martin. All were unanimously found not guilty at Southwark Crown Court in London after a 15-week trial.

It was the second UK trial that formed part of a global investigation that has taken nearly eight years and involved the Financial Conduct Authority, City of London Police, US Department of Justice and the Commodity Futures Trading Commission, amongst others.

David Green, director of the SFO, commented that the key issue in this trial was whether these defendants were party to a dishonest agreement with Hayes.

“By their verdicts the jury have said that they could not be sure that this was the case. Nobody could sensibly suggest that these charges should not have been brought and considered by a jury.”

A further trial of individuals charged with the manipulation of US dollar Libor is scheduled to begin on 15 February, while a trial of individuals charged with the manipulation of the Euro Interbank Offered Rate (Euribor) is scheduled to begin on 4 September 2017.

Since Hayes’s conviction, the SFO has charged 11 former traders from Barclays, Deutsche Bank and Société Générale with manipulating Euribor, along with another five from Barclays who are still due to stand trial.

Alison McHaffie, a regulatory partner with law firm CMS, said that apart from being acutely embarrassing to the SFO, these verdicts show how difficult it is to demonstrate criminal activity by individuals for this type of type of market misconduct.

“It is always easier to bring regulatory action rather than criminal prosecution against the firms themselves. In future, the regulator will find it easier to pursue disciplinary actions against individuals for wrongdoing.”

peter.walker@ft.com