Convictions in the latest LIBOR trial brought by the SFO

Emma Deacon QC and Dominic Lewis, led by James Hines QC, were instructed by the Serious Fraud Office in the latest case arising out of the alleged manipulation of LIBOR, a key borrowing rate against which large volumes of interest rate derivatives trades are settled each day.

After an 11-week trial, the jury convicted Jonathan Mathew, Jay Merchant and Alex Pabon of conspiracy to defraud. Merchant and Pabon were US Dollar interest rate derivatives traders at Barclays Bank, based in New York, during the indictment period. Mathew was a cash trader at Barclays, based in London, and was one of those responsible for making the bank’s daily submission into the LIBOR-setting process. Peter Johnson, a senior LIBOR submitter and head US Dollar cash trader at Barclays (also based in London) had previously pleaded guilty to the indictment.

The defendants were sentenced to six and half years’ imprisonment (Merchant), four years’ imprisonment (Johnson and Mathew) and two years nine months’ imprisonment (Pabon).

Whilst employed by Barclays, the convicted defendants conspired with each other and other individuals to procure or make submissions of rates into the US Dollar LIBOR setting process, with a view to advantaging the trading positions of derivatives traders at Barclays, and therefore necessarily prejudicing the economic interests of others in what was a zero sum game. The indictment covered the period from June 2005 to September 2007.

The jury could not reach verdicts in relation to two co-defendants, Stylianos Contogoulas and Ryan Michael Reich, who will now face a retrial in February 2017.

The case was reported in the mainstream and financial press: The Guardian and BBC.

Alex Pabon was represented by Tom Allen QC, Catherine Rabaiotti and Richard Padley.

Emma Deacon QC and Dominic Lewis have also been instructed by the SFO, together with James Waddington QC, to prosecute a related case arising out of the alleged manipulation of EURIBOR. That trial is due to take place in September 2017.

Case reported: BBC.