Following a three-month trial with the jury, Jonathan Mathew, Jay Merchant, and Alex Pabon, former Barclays plc (NYSE:BCS) traders, have been found guilty of manipulating the benchmark Libor rate from 2005 to 2007.
Previously, Peter Johnson, who is also a former Barclays’ trader, already pleaded guilty in court.
The prosecutors had accused Merchant and Pabon of asking Johnson and Mathew, Libor submitters, to falsify the interest rates.
Since trillion pounds of financial transactions are based on the benchmark rate, the fraudulent activities have cost financial institutions vastly.
However, the jury has not yet come up with a final verdict on Stylianos Contogoulas and Ryan Reich, two other defendants. It is still yet to be decided whether their cases will be eligible for retrials.
Defense and Verdict
Despite the strong foundation of the allegations, the defendants believe that they are not guilty of such crime. They continue to argue that the lack of knowledge that their activities are illegal is enough grounds to save them from the verdict.
Merchant and Pabon reiterated that they were only doing their jobs. Meanwhile, Mathew, who was under Johnson, argued that he just filled in for the latter and that he is still very much untrained to be involved in such illegal activities.
Given the circumstances, the jury found all three former traders guilty of the charges, claiming that the main point of the case is rooted in dishonesty.
Barclays already has got itself in a similar Libor manipulation case four years ago, paying nearly £300 million worth of fines.
Another remarkable Libor scandal in the US history is that of Tom Hayes, a former trader of Citigroup, Inc. (NYSE:C) and UBS Group AG (NYSE:UBS). Hayes was sentenced to 14 years in prison last year. However, his time was reduced by three years following a successful appeal.
Interestingly, six of his brokers were cleared earlier this year as the prosecutors failed to substantiate the allegations in front of the jury.
Hayes still continues his fight against the verdict, trying to bring the case to the Criminal Cases Review Commission.