In London, six ex-brokers accused of helping to rig interest rate benchmarks are now on trial in criminal court. The defendants include ex-ICAP (IAP) employees Darrell Read, Danny Wilkinson, and Colin Goodman, former RP Martin employees James Gilmour and Terry Farr, and ex-Tullet Prebon broker Noel Cryan, who are all charged with conspiring to rig the rates. All of them have pleaded not guilty.
According to prosecutors, the brokers tried to persuade traders at banks to turn in false Libor rates. They are accused of assisting convicted and former Citigroup (C) and UBS (UBS) trader Tom Hayes to rig Libor. Hayes was recently sentenced to fourteen years behind bars. He is appealing his case. The defendants also allegedly helped others to manipulate Libor submissions related to the Japanese yen.
Specifically, Read, Wilkinson, and Goodman are charged with conspiring with ICAP employee Brent Davies, Hayes, and other traders at UBS. The ex- RP Martin employees are charged of conspiring with traders at UBS, Luke Madden at HSBC (HSBC), and Paul Robson at Rabobank to manipulate the rate. Farr is also accused of conspiring with Hayes while at Citigroup. And former Tullet Prebon’s Noel Cryan also allegedly conspired with UBS traders.
A global probe into Libor rigging has been going on for a number of years. In 2012, Barclays (BARC) settled rate rigging claims made by global authorities, and some three dozen people and at least 18 financial institutions, indulging UBS, Royal Bank of Scotland (RBS), and Deutsche Bank (DB), have become embroiled in the scandal.
Libor is the estimated rate that banks are willing to charge to lend each other money. It is used to set rates on trillions of dollars of consumer loans.
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First brokers stand trial over Libor, CNBC, October 4, 2015
Ex-UBS and Citigroup Trader Gets 14 Years in Prison for Libor Rigging, Institutional Investor Securities Blog, August 5, 2015
Libor-rigging trial: six accused appear in court, The Guardian, October 6, 2015