LIBOR Rigging Trial Begins in London

SharingFilesSix current and former employees of Barclays and Deutsche Bank are to go on trial next year on criminal charges that they conspired to manipulate a global benchmark interest rate, a British court decided on Wednesday.

The Serious Fraud Office, which investigates financial crime in Britain, began criminal proceedings last year against 11 people who worked at Barclays, Deutsche Bank and Société Générale in a case related to the manipulation of the euro interbank offered rate, or Euribor. Six of those individuals made their first court appearance in London this week. A trial date of Sept. 4, 2017, was set at Southwark Crown Court in London for Christian Bittar, a former senior trader at Deutsche Bank; Achim Kraemer, a rate submitter at Deutsche Bank; and the former Barclays employees Philippe Moryoussef, Carlo Palombo, Colin Bermingham and Sisse Bohart. All six have denied wrongdoing. In November, a London tribunal found that Mr. Bittar had been improperly identified by the Financial Conduct Authority of Britain, another regulator, in its findings as part of a $2.5 billion settlement with Deutsche Bank in April over the rigging of rates. Mr. Bittar, who lives in Singapore, was not mentioned by name, but he was identified as “Manager B” in those findings. He said that his identity could be determined based on the documents and that he should have had the right to challenge the findings before they were made public. He is one of several former bank employees who have challenged the Financial Conduct Authority’s method of identifying individuals in settlement documents related to the rate-rigging inquiries.

Five other people facing criminal proceedings by the Serious Fraud Office related to Euribor failed to appear at a hearing on Monday in Westminster Magistrates’ Court in London. The fraud office said it was considering its options, which include seeking European arrest warrants because the people live outside Britain. Separately, the fraud office has previously charged more than a dozen people as part of a long-running investigation into the manipulation of the London interbank offered rate, a similar benchmark interest rate, known as Libor. The Libor scandal has led to billions of dollars in fines and has rocked the reputations of some of the world’s biggest banks, including Barclays, the Royal Bank of Scotland, UBS and Deutsche Bank. To set Libor, Euribor and others, banks submit the rates at which they are prepared to lend money to one another, on an unsecured basis, in various currencies and at varying maturities. In August, Tom Hayes, a former trader at Citigroup and UBS, became the first person to be convicted on criminal charges in Britain of conspiring to manipulate Libor. In December, an appeals court declined to overturn his conviction, but it reduced his sentence to 11 years in prison. British authorities said on Monday that they had begun criminal proceedings against a former Société Générale employee in a continuing investigation into the manipulation of a global benchmark interest rate.

Stephane Esper, the former Société Générale employee, is the latest person expected to face criminal charges in an inquiry by the Serious Fraud Office, which investigates financial crime in Britain, related to the manipulation of the euro interbank offered rate, or Euribor. The fraud office announced in November that it expected to bring conspiracy to defraud charges against 10 current and former employees of Barclays and Deutsche Bank when they make their first court appearance at Westminster Magistrates’ Court in London in January. Mr. Esper also is expected to be charged at that time. “Criminal proceedings will be issued against other individuals in due course,” the fraud office said in an update on its website.

A Société Générale spokeswoman confirmed that Mr. Esper left the bank in 2009, but declined to comment further. The fraud office has previously charged more than a dozen people as part of a long-running investigation into the manipulation of the London interbank offered rate, a similar benchmark interest rate known as Libor.

The Libor scandal has led to billions of dollars in fines and has rocked the reputations of some of the world’s biggest banks, including Barclays, the Royal Bank of Scotland, UBS and Deutsche Bank. To set Libor, Euribor and other rates, banks submit the rates at which they are prepared to lend money to one another, on an unsecured basis, in various currencies and at varying maturities. Société Générale was among a group of global financial institutions fined a combined 1.7 billion euros, or about $1.8 billion, by the European Union in December 2013 to settle charges that they colluded to fix benchmark interest rates, including Euribor.

Since the first inquiry began seven years ago, the Libor scandal has engulfed some of the world’s largest banks and tarnished the reputations of many of Britain’s leading lenders. Last summer, Tom Hayes, a former trader at Citigroup and UBS, became the first person to be convicted on criminal charges in Britain of conspiring to manipulate Libor. An appeals court declined to overturn his conviction, but reduced his sentence to 11 years in prison.