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Libor rigging trial: Former Barclays bankers jailed

Libor traders, from left to right: Jonathan Mathew; Alex Pabon; Jay Merchant; and Peter Johnson Image copyright PA
Image caption Libor traders, from left to right: Jonathan Mathew; Alex Pabon; Jay Merchant; and Peter Johnson

Four City traders have been ordered to serve jail sentences after being convicted of rigging the Libor rate.

Jay Merchant was sentenced to six-and-a-half years, while Peter Johnson, who pleaded guilty, and Jonathan Mathew were each jailed for four years.

Alex Pabon received two years and nine months. All four worked for Barclays.

Judge Anthony Leonard told Southwark Crown Court: "What this case has shown is the absence of integrity that ought to characterise banking."

Libor - or the London inter-bank offered rate - is used by banks to set prices of financial products. It underpins trillions of pounds in loans for households and companies worldwide.

The former Barclays employees are the only other people to be jailed in the Libor rigging scandal since Tom Hayes was convicted last year.

The Serious Fraud Office (SFO), which brought the investigation, pointed to comments from the judge that the bankers' behaviour showed "an absence of integrity".

The judge added that the four men would serve half their sentences in prison and then be released, the SFO said.

'Position of power'

Judge Leonard said he gave Merchant the longest sentence because he judged him to "bear greatest responsibility for what happened".

"I do not judge that you were the originator of the scheme, but it was under your leadership the manipulation took off," the judge said on Thursday. "You abused a position of power and authority."

Mathew, of Shenfield, Essex, and Merchant and Pabon, who both live in the US, were convicted of conspiracy to defraud on Monday after an 11-week trial.

Johnson, of Tunbridge Wells, pleaded guilty of the same charge in October 2014, but was only sentenced on Thursday.

Image copyright Getty Images
Image caption Tom Hayes was convicted of conspiracy to defraud last year

Scandal

The convictions are a victory for the SFO after five City brokers were cleared in January of helping Hayes to manipulate the Libor rate.

Hayes, a former star trader, was initially sentenced to 14 years in prison, although that was later reduced to 11.

The US Justice Department said it is dropping charges against three former brokers acquitted in the January ruling.

The Libor rigging scandal erupted in 2012 when Barclays was given a £290m fine and its chief executive Bob Diamond was forced to resign.

Royal Bank of Scotland, UBS, Deutsche Bank and broker Icap have also received heavy fines for attempting to manipulate the rate.

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