Friday 24 November 2017

Former brokers accused of Libor rigging fraud

Terry Farr leaves Westminster Magistrates Court in central London.
Terry Farr leaves Westminster Magistrates Court in central London.
James Gilmour arrives at Westminster Magistrates Court in central London.

Tommy Wilkes

Two former brokers appeared in a London court today on fraud charges, having conspired with employees at UBS, HSBC, Rabobank, Citi and Tullett Prebon to manipulate Libor rates, UK prosecutors alleged.

Terry Farr, 41, and 48-year old James Gilmour, former staff at UK interbroker dealer RP Martin, are accused of conspiracy to defraud along with former Citi and UBS trader Tom Hayes.

The two men, arrested last December alongside Hayes, are the first brokers to face criminal action in connection with a global investigation into the Libor interest rate rigging scandal.

A central cog in the world financial system, the London interbank offered rate (Libor) is used as a price reference for hundreds of trillions of dollars worth of contracts, ranging from complex derivatives to everyday credit card bills.

The scandal has sparked public and political outrage and laid bare the failure of authorities and bank bosses to spot the manipulation.

So far, regulators have fined Britain's Barclays, Switzerland's UBS and Royal Bank of Scotland a total of $2.6 billion and prosecutors have charged four men.

Hayes, Gilmour and Farr are the first to face court. The fourth suspect, Roger Darin, was charged by U.S. prosecutors last December. He is currently in Switzerland.

The case against the two men, who both live in the southeastern English county of Essex, will increase scrutiny of the role played in the scandal by interdealer brokers, who act as middlemen between the buyers and sellers of financial securities such as bonds, currencies or interest rate swaps.

Farr, dressed in a dark suit and tie, and Gilmour, dressed in an open neck white shirt, sat in the dock in London's Westminster Magistrates Court and spoke only to confirm their names and addresses and their bail conditions.

The two were granted bail until July 30, when their case will be transferred for a hearing to the higher Southwark Crown Court. They were told not to contact each other or Hayes, and they gave no indication of how they would plead.

Citi and UBS declined to comment. HSBC, Tullett Prebon and Rabobank did not immediately respond to requests for comment.


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