Four ex-Barclays bankers jailed for rigging Libor rate

London (AFP) – Four former Barclays bankers were Thursday jailed for manipulating the key inter-bank Libor interest rate, with the highest sentence being 6.5 years, Britain’s Serious Fraud Office said.

US-British citizen Jay Merchant, 45, received 6.5 years, while Jonathan Mathew, a 35-year-old Briton and Peter Johnson,  61, were each jailed for four years, the SFO said. 

US national Alex Pabon, 38, got two years and nine months, it added.

A London court had on Monday convicted three of the four over the rigging of Libor — a key reference for financial products globally — between June 1, 2005 and August 31, 2007.

Johnson had already pleaded guilty so did not have to stand trial. In addition to his jail term, Johnson was ordered to pay a financial penalty of around £114,500 ($148,000, 134,000 euros), as well as  £30,000 in costs.

The court has yet to rule on the penalty amounts, or so-called confiscation orders, to be paid by the other convicted former bankers.

Judge Anthony Leonard said shown “an absence of integrity” in their behaviour.

Two colleagues of the convicted former bankers, Stylianos Contogoulas and Ryan Reich, also stood trial but the jury was unable to reach a verdict in their cases. 

The SFO has since said it will seek a retrial of the pair.

The 11-week trial had heard from the prosecution that those convicted were “driven by money” when they conspired to fix Libor.

Libor, or the London Interbank Offered Rate, is a global benchmark that is calculated daily, using estimates from banks of their own interbank rates.

It underpins the terms of $500 trillion of contracts from mortgages to the cost of corporate lending.

The scandal erupted in 2012 when Barclays was fined £290 million by British and US regulators for attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009. Euribor is the eurozone equivalent of Libor.

Royal Bank of Scotland, Swiss lender UBS, Rabobank and broker Icap have also received heavy fines over the scandal, which has led to three British trials. 

Tom Hayes, a banker who worked for UBS and Citigroup, was last year sentenced to 14 years in prison, reduced to 11 years on appeal.

A second trial resulted in the acquittal of six workers earlier this year. 

The trial of six individuals charged with manipulating Euribor will begin in London on September 4.