Ex-Barclays traders conspired to 'cheat' the system by rigging rates, London court hears

Three former Barclays traders were part of an “elite” group who conspired to “cheat” the global financial system to get an edge over rivals, a London court heard today.

The trio, who worked in London at the bank's investment arm, Barclays Capital, are accused of trying to influence the setting of a global benchmark interest rate known as the Euro Interbank Offered Rate, or Euribor.

They worked with traders at Barclays, Deutsche Bank and other banks to “line their own pockets,” said James Waddington on behalf of the Serious Fraud Office at Southwark Crown Court, opening the case against Colin Bermingham, Carlo Palombo and Sisse Bohart.

The three face charges, which they all deny, of manipulating Euribor between 2005 and 2009.

The case is a retrial after jurors failed to reach verdicts in a first trial against the three last year involving the same allegations.

“We suggest that intelligent, competitive and ambitious employees within Barclays and Deutsche cheated a global financial system to give them an edge on what otherwise were honest and lucrative deals,” Waddington said.

The fraud was “tied up” with the normal course of their daily work, he told the jury. They were an “elite group” who were well paid and able to exploit their fraudulent behavior to “get a promotion, or a better pay package, with another bank,” Waddington said.

Former Barclays trader Philippe Moryoussef and former Deutsche Bank trader Christian Bittar were both convicted of conspiring to rig interest-rate benchmarks last year, jurors were told today. Bittar was one of the most successful “short-end” currency traders in the world prior to his conviction, they heard.

“Moryoussef and Bittar were by far the most heavily involved in it, there is no doubt,” Waddington said. “The fact of these convictions … proves that there was a conspiracy to defraud, and that those two men were members of that conspiracy. This trial is about whether these defendants were also party to that conspiracy.”

Jurors will hear evidence that interest rate traders Moryoussef and Palombo “prevailed” on Bohart and Bermingham, who were responsible for setting Barclays’ submission for the Euribor rate, to take account of their own trading positions.

“We suggest Mr Bermingham and Miss Bohart, rather than giving their own true opinion of the rate, often factored in [requests from Moryoussef and Palombo],” Waddington said.

Messages from the traders told Bermingham and Bohart to either put the rate “high” or “low.” This happened “time and time again” over a period of several years, he said.

The case continues.