The convictions of two former Barclays bankers in the Serious Fraud Office’s long and protracted probe into Euribor manipulation will inject a new sense of purpose into an agency weary from a string of defeats and climbdowns.
Today Carlo Palombo and Colin Bermingham were sentenced to a combined nine years in prison for their role in the conspiracy, in which they were found to have entered false and misleading rates for the euro currency’s money market reference rate to boost their trading books in the lead-up to the financial crisis.
Along with the Libor cases of recent years, rigging trials provided an arena for the general public to pass judgement on that sorry episode, from which this city, and even the country, is still reeling.
In securing these convictions, the SFO can say it has placed itself at the heart of righting the wrongs of the past, which many believe occurred without the perpetrators being held to account. The agency’s win today takes the total number of Euribor convictions to four, with two acquittals.
The judge said the former bankers earned vast amounts of money but were still human beings who were tempted by the prospect of earning even more.
For some, then, the outcome of today’s trial will provide a sense of closure. But for others, it was never more than a circus.
Critics of the process argue that traders have been sent to prison while more senior managers escaped prosecution.
In his sentencing remarks, the judge acknowledged this gulf. He accepted that Palombo was a junior trader and that his training was “modest” and compliance was “at best inadequate”.
The judge said a hazy definition of Euribor and the code of conduct meant there was an “open door for those involved in the conspiracy to manipulate, or attempt to manipulate, the Euribor rate”.
Senior managers “should have known what was going on and should have stopped it”. The fact the Euribor code of conduct gave no guidance on how to submit rates “might be thought by an interested observer to be at best foolhardy, if not utterly negligent”, he said.
Still, none of that matters to the SFO. After the botched Tesco trial, a new legal claim from mining firm ENRC, and the abandonment of high-profile probes into GSK and Rolls-Royce, the fraud squad needed a win. It will believe this victory gives it the credibility to press on.