Former Barclays employees jailed in Libor-rigging case

Southwark Crown Court in London

The ex-bankers were sentenced at Southwark Crown Court in London

Jay Merchant, 45, a former trader at Barclays in New York, received a sentence of six and a half years, while Jonathan Mathew, 35, and Peter Johnson, 61, both former rate submitters in London, received four-year sentences.

Alex Pabon, a 37-year-old American who worked as a trader at Barclays in New York, was given a reduced sentence of two years and nine months, for what the judge described as a lesser role in the conspiracy.

All four men acted for their own and Barclays’s gain by conspiring to manipulate the London interbank offered rate, or Libor, Judge Anthony Leonard said at the sentencing on July 7. They each acted with sophistication and planning in carrying out the rate manipulation, the judge said, and collectively caused Barclays’s counterparties to lose millions of pounds.

Among the four men, Merchant bore “the greatest responsibility for what happened,” Judge Leonard said, although the judge added that he hadn’t necessarily come up with the idea to rig rates. Merchant shook his head as the judge spoke.

The four men arrived in court in casual clothes, toting duffel bags and suitcases. Half of their sentences must be spent in custody, the judge said.

The UK Serious Fraud Office, which brought the case, alleged the four men acted dishonestly by trying to influence Libor, a benchmark used to set interest rates on trillions of dollars in securities and loans. Johnson pleaded guilty to conspiracy to defraud in October 2014. Mathew, Merchant and Pabon denied the allegations and defended their actions in a three-month trial.

A jury earlier in the week failed to reach a verdict on two Barclays traders who were part of the same case, Stylianos Contogoulas and Ryan Reich. The SFO on July 6 said it would seek a retrial of the two men.

The sentencing came just under a year after former UBS and Citigroup trader Tom Hayes received a 14-year jail term for Libor-rigging. Hayes’s sentence was later reduced to 11 years. Six brokers who allegedly conspired with Hayes were acquitted in January in a separate trial.

Judge Leonard said there were “real and significant differences” between the actions of Hayes and the four men sentenced on July 7. However, he said both cases showed how the City had “become a very different place to work over the years” and that changes to financial regulation more than a decade ago appeared to have damaged integrity.

“The jury has characterised your behaviour as dishonest, which you must have known it was,” the judge said, addressing the men.

Banks and other financial firms have paid billions of dollars in penalties over alleged Libor-rigging since a global probe started several years ago. Barclays paid $ 450 million to US and UK authorities in 2012 and admitted that traders and managers had sought to rig the rate.

Write to Margot Patrick at

This story was first published by The Wall Street Journal

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