U.S. Dollar (Eurodollar) LIBOR Rates

The London Interbank Offered Rate (LIBOR)
from the interest-rate specialists at www.FedPrimeRate.comSM

Thursday, June 16, 2016

Reuters: Former Barclays Trader Tells Court LIBOR Rate Promise Was "Just Banter"

Stylianos Contogoulas
Stylianos Contogoulas
Here's a clip from a Reuters article, dated May 18, 2016:

 "...A former Barclays trader accused of conspiring to rig a global interest rate said a promise to name a colleague in a book and to invite him to his bar in return for help in setting LIBOR was 'just banter'.

Greek-born Stylianos Contogoulas told Southwark Crown Court on Wednesday that he had been instructed by his boss within days of joining the Barclays dollar desk in 2005 to tell a senior colleague the level he wanted Libor rates set at.

'It was done very openly and in a very normal way and gave the impression this was a regular, normal thing,' Contogoulas said on his first day in the witness box.

Contogoulas, 44, is one of five former Barclays bankers charged with conspiracy to defraud by manipulating Libor, the London interbank offered rate, a benchmark for rates on around $450 trillion of financial contracts worldwide.

He and former colleagues Jonathan Mathew, Jay Merchant, Alex Pabon and Ryan Reich all deny dishonestly skewing rates - designed to reflect bank borrowing costs - to favor trading positions between June 2005 and September 2007.

As the second defendant to testify in the criminal trial, Contogoulas told the jury that he had been given no impression that asking for LIBOR rates was wrong or dishonest, that he had never had appropriate training, had not sought to conceal such requests ‎and knew Barclays monitored communications.

In an email exchange on March 13, 2006, Contogoulas told senior London submitter Peter Johnson: 'Remember when I retire and write a book about this business your name will be written in golden letters...and you'll have an open invitation to my bar in the Greek Islands he he'

Johnson responded: 'I would prefer this not to be in any books!'

Contogoulas said during his testimony on Wednesday that this was all 'just banter, not serious'.

'Did anyone ever comment on your emailed requests to (LIBOR) submitters?' asked his lawyer J‎ohn Ryder.

'No,' said Contogoulas, adding that he spent just minutes each day doing so and received no personal advantage from doing so.‎

Johnson's lawyer declined to comment on Wednesday.

Contogoulas, who passed on Libor requests from more senior New York traders to submitters in London, said he stopped making verbal requests and started emailing them because U.S. colleagues might otherwise question whether he was passing their requests on.

Emma Deacon, counsel for the Serious Fraud Office (SFO) prosecuting the case, questioned whether Contogoulas was minimizing his role by presenting himself as a conduit from New York to London, while in fact he traded the Barclays dollar book each morning.

'You're not seeking to minimize it (your role in the Libor requests)?' Deacon said.

'No,' Contogoulas replied.

'You were just a conduit?'

'Yes,' he said.

Contogoulas said the volume of his trades amounted to perhaps five percent of Barclays' whole short-end dollar book and his main role was as a 'babysitter' while the New York desk was closed.

Contogoulas's evidence follows that of Mathew, a former Libor submitter, who has told the court he had been taught by Johnson to adjust rates to suit traders and only realized this was wrong when interviewed by Barclays' lawyers in September 2009.

Mathew said he initially lied when U.S. authorities, who kickstarted a global Libor investigation in 2008, quizzed him in 2010 because he was afraid of his boss Johnson and of losing his job. He only told the truth when U.S. prosecutors offered him a non-prosecution agreement in 2011, he said.

The jury was told last week that Johnson, who had been charged alongside the other five defendants, pleaded guilty in 2014. The third Libor trial brought by the SFO in London is scheduled to last 12 weeks..."

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Thursday, April 7, 2016

Former Trader Tom Hayes Ordered to Pay £878,000 ($1.2 Million) in LIBOR Case

From The New York Times:

...LONDON — A judge on Wednesday ordered Tom Hayes, a former UBS and Citigroup trader, to forfeit more than 878,000 pounds, or about $1.2 million, in bonuses and other compensation because of his conviction last year of manipulating a global benchmark interest rate known as LIBOR.

Mr. Hayes, who is serving an 11-year prison sentence, was the first person to go to trial in Britain and be convicted on criminal charges related to the manipulation of the London Interbank Offered Rate, or LIBOR.

The ensuing 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.

“The court acknowledged the challenges of quantifying the benefit from crime in this case,” Mark Thompson, the head of the Serious Fraud Office’s Proceeds of Crime Division, said in a news release. “The outcome is a substantial confiscation order, which Mr. Hayes will need to satisfy or face a further period of imprisonment.”

Mr. Hayes testified at a five-day confiscation proceeding last week that he lost nearly £1 million through personal trading after he was dismissed from Citigroup.

The trading losses, along with legal fees, wiped out much of his savings, Mr. Hayes said at the time.

The decision means that Mr. Hayes will probably be forced to sell his family’s home in Surrey.  The seven-bedroom home, known as Old Rectory, is worth about £1.7 million.

At a hearing on Wednesday, prosecutors said Mr. Hayes had only about £49,000 in cash, jewelry and other assets that could be sold quickly to satisfy the judgment.

The Serious Fraud Office had accused Mr. Hayes, who worked as a trader in Tokyo, of being a ringleader among more than a dozen traders in what authorities said was a brazen scheme to manipulate LIBOR, which helps determine the borrowing costs for trillions of dollars in loans. He was accused of engaging in misconduct from 2006 to 2010.

Mr. Hayes was convicted of conspiring to manipulate Libor in August. He was originally sentenced to 14 years in prison, but his sentence was reduced to 11 years in prison by an appellate court in December.

This month, an appeals court denied his request to have the Supreme Court, Britain’s highest court, review the case, making it more difficult for him to challenge his conviction.

Mr. Hayes is expected to ask the Criminal Case Review Commission, which examines miscarriages of justice, to examine his case. The independent body can refer criminal cases back to the appellate court for review.

At trial, Mr. Hayes’s lawyers argued that he was open about his conduct and did not believe at the time that he was acting dishonestly.

To set Libor and other rates, banks submit the rates at which they would be prepared to lend money to one another, on an unsecured basis, in various currencies and at varying maturities.

The evidence against Mr. Hayes included 82 hours of voluntary testimony that prosecutors said he provided to the Serious Fraud Office over five months. The authorities said he admitted to rigging rates and provided testimony against many former friends and colleagues, including his half brother.

Mr. Hayes testified during the trial that he decided to cooperate with British authorities because he feared being extradited to the United States, where he is also facing criminal charges, and wanted to remain close to his wife and child.

After providing the voluntary testimony to British authorities, Mr. Hayes stopped cooperating with prosecutors in 2013 and chose to plead not guilty to the charges in Britain.

Mr. Hayes remains the only person convicted at trial in Britain for manipulating LIBOR.

Prosecutors suffered a setback in January when six former brokers were acquitted of criminal charges that they helped Mr. Hayes manipulate LIBOR.

A third trial in London of others accused of manipulating Libor is expected to begin next month.
The first trial in the United States of people accused of rigging LIBOR ended in the conviction in November of two former London-based traders. The men were sentenced to prison terms this month...

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Saturday, October 24, 2015

Former Rabobank Trader Paul Thompson, Accused of LIBOR Rigging, Arrested Down Under

Here's a clip from today's Wall Street Journal article:

"...A former Rabobank trader wanted by U.S. prosecutors for his alleged role in manipulating a key benchmark interest rate has been arrested, Australian authorities said Saturday.
Paul Thompson, an Australian citizen and former derivatives trader for Dutch bank Rabobank Groep NV in Singapore, was detained Thursday in the Western Australian capital of Perth following an extradition request by the U.S., a spokesperson from the Australian Attorney-General’s Department said.
Mr. Thompson is one of seven former Rabobank employees charged in connection with the world-wide LIBOR manipulation scandal that has ensnared at least 18 financial institutions and 35 individuals. The interest rate underpins bank lending products worth trillions of dollars—from mortgages to student loans.
'Mr. Thompson is wanted to face prosecution in the United States for wire and bank fraud offenses,'  the spokesperson said.
In a statement, Mr. Thompson’s wife, Robyn, said: 'There is no reason for Paul to be charged by the U.S. For this reason we were hoping that Paul could defend himself against any allegations in either Australia or the U.K., so he could have access to the necessary evidence, financial and emotional support to do this properly.'  Ms. Thompson also said his family would be seeking bail for the trader. A spokeswoman at Rabobank’s base in Utrecht declined to comment on the arrest and court case, saying Rabobank wasn’t a party in the current U.S. trial.
Two other former Rabobank traders, Anthony Allen and Anthony Conti, are currently facing court in New York on charges of conspiring to rig LIBOR for their own benefit between May 2006 and early 2011. If convicted, they could spend years in prison. Both men deny the allegations. Meanwhile, three former Rabobank colleagues have pleaded guilty to criminal charges of manipulating LIBOR. Another former Rabobank yen LIBOR derivatives trader, Tetsuya Motomura, hasn’t yet entered a plea. He was charged, alongside Mr. Thompson, with conspiracy to commit wire and bank fraud, according to the Justice Department.
The Rabobank trial parallels similar court cases under way in the U.K. So far, 13 individuals have been charged in the U.S. in connection with the LIBOR investigation. Some of the world’s largest banks have admitted to manipulating the rate, including Rabobank.
In 2013, when Rabobank agreed to pay $1.07 billion in a settlement with U.S., British, Dutch and Japanese authorities, a member of its executive board said: “It’s shameful what has happened.”
This summer, a British judge sentenced Tom Hayes, a former UBS and Citigroup trader, to 14 years in prison for manipulating LIBOR. He became to first individual to be criminally convicted in the world-wide probe..."

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