Ex-Barclays trader convicted in Euribor rigging scandal

A former trader at Barclays has been convicted for his role in a conspiracy to rig the Euribor interbank lending rate.

Carlo Palombo (40), a British-Italian dual national, was found guilty by a jury on a 10-2 majority verdict at Southwark Crown Court in London on Tuesday. However, Sisse Bohart (41), a Danish fellow Barclays employee, was acquitted.

The jury has yet to reach a verdict on a third individual, Colin Bermingham (62), a Briton.

The Serious Fraud Office, which brought the prosecution, alleged that between January 1st, 2005 and December 31st, 2009, the trio conspired with two star traders, Christian Bittar and Philippe Moryoussef, and a number of other individuals to fix the Euribor rate.

Euribor is the average interest rate at which European banks are prepared to lend to one another and is based on daily submissions by a number of “panel banks”.

The SFO had alleged that traders such as Moryoussef and Palombo had asked rate setters such as Bermingham and Bohart to tailor their submissions in order to nudge the rate up or down and suit trades in which they were engaged.

In summing up the second trial, Judge Michael Gledhill told the jury to consider if any of the accused was a “knowing party to the conspiracy . . . to make or procure submissions of Euribor rates which were false or misleading”.

The defendants said no one at the bank had ever raised concerns over the Euribor submissions process and it was not until after the rate-rigging scandal came to light that they were told to change their behaviour.

Palombo told the jury that colleagues would yell out their preferences for the daily submissions and discuss them as a team, but there was “no suspicion anything was dodgy or secret”.

The result of the trial is a boost to the SFO after securing the convictions of Bittar and Moryoussef last year. The anti-fraud agency has been heavily criticised after a judge threw out charges against two Tesco executives, while it has recently dropped two of its biggest and longest-running investigations, into Rolls-Royce and GSK, citing a lack of evidence.

Moryoussef, a French citizen and former Barclays trader who was tried in absentia at Southwark Crown Court last year after refusing to attend the trial or appoint a legal representative in the UK, was given a prison term of eight years for conspiracy to defraud.

Bittar, who worked at Deutsche Bank at the time of the conspiracy and had a reputation as one of the most talented moneymakers in the business, had already pleaded guilty to the same charge and was sentenced to five years and four months. – Copyright The Financial Times Limited 2019