Libor three – Who’s who?
After a trial lasting just short of three months, three ex-Barclays bankers have been found guilty of Libor-rigging related offences. The jury was, however, unable to arrive at a decision for the other two before being discharged.
But who were the men in the docks?
Jonathan Mathew, 35
Verdict: Guilty, 11-1 majority verdict
Mathew was the only Libor submitter to be standing trial, his boss Peter Johnson having pleaded guilty before the case started in April. He joined the bank at the age of 19, with just three A-Levels to this name.
During the opening speeches of the trial, his lawyers told the court that Mathew’s usual job involved looking after the Canadian dollar submissions, only being handed the metaphorical keys to the US dollar book when his boss was away. In fact, across the indictment period, which spanned more than 500 days, Mathew only received requests from traders to set Libor at a certain rate on 28 days.
Bloomberg reported that, while on the stand, Mathew described how he was often humiliated by Johnson, including being hit on the back of the head with a baseball bat as punishment for his mistakes.
When the jury delivered Mathew’s verdict, an audible gasp was heard in the courtroom. Mathew himself was clearly upset and anxious about the decision, slumping forward to cover his face with his hands.
Stylianos Contogoulas, 44
Verdict: Jury did not agree on verdict
Contogoulas was a former Barclays trader and, to a certain extent, a de facto IT guy. A Greek national, Contogoulas’ background was not in banking. He studied computing at Imperial College in London, before returning to Greece to complete compulsory national service and then spending five years in computing roles. A chat with his father then took him to Manchester Business School for an MBA and, from there, onto Barclays as trader.
However, Contogoulas learnt the hard way never to let slip that you know something about computers lest you want to be bombarded with everybody’s IT queries for the foreseeable future, as his first experiences at Barclays saw him not trading but helping to move the trading process to a more digital platform. He eventually put his foot down and was handed a trading book.
"He must have known next to nothing," his barrister remarked of his client's early trading experiences at the bank.
Jay Merchant, 45
Verdict: Guilty, unanimous verdict
Although an able mathematician who scored highly on the aptitude test for Stern Business School, former Barclays trader Merchant said while under cross-examination that his Libor knowledge left something to be desired. "There were many other tasks that were more important than that," he quipped when asked why he hadn’t cracked open the Libor textbooks immediately after rocking up to Barclays’ offices in the US.
When not in the office for Barclays, he could often be found out on the tennis court. Although early on in the trial the prosecution produced an interview with Merchant in which he claimed he had sat down to lunch with former global head of fixed income Eric Bommensath to discuss how the New York traders should be communicating with the London cash desk, Bommensath later said that his social interaction with Merchant extended to a game of tennis.
Merchant, who was line manager to both Pabon and Reich, was the highest paid of all the men on trial, pocketing £2.2m for his efforts in 2007.
Alex Pabon, 38
Verdict: Guilty, 10-2 majority verdict
Pabon was a Barclays trader until the summer of 2006, having joined the bank in 2004. Bloomberg reported that Pabon emotionally told the courtroom the he had left the bank feeling burned out, before moving to Texas and turning his back on banking. In 2013, he joined a software company, after going through a period with no “serious” jobs.
Pabon’s requests on Libor were perhaps some of the more eloquent read out in the courtroom, although fellow defendant Merchant was not a fan of his communication style, calling him his “verbose friend” in one of his emails.
Ryan Reich, 34
Verdict: Jury did not agree on verdict
Described by his lawyer as “the big bald one”, Reich was also a former Barclays trader and, essentially, Pabon’s replacement after he left the bank.
Reich and his lawyers protested several times during the trial that others involved in the rate-setting process must have been aware of the communications going on between the traders and the submitters.
During closing arguments, his lawyer said: “The idea that these individuals [at the SFO and the BBA] were unaware of banks’ positions influencing Libor is like watching a man on holiday taking a detour through a crowded nudist beach in the south of France and when his wife says ‘What on earth were you doing?,’ he says ‘Oh, was it a nudist beach? I didn’t realise.’”
And the one who wasn’t on trial…Peter Johnson, 61
Pleaded guilty before the start of the trial
It doesn’t take too keen a sense of observation to notice that former Libor submitter Peter Johnson was not among the men in the dock during the trial. Johnson pleaded guilty in October 2014, making him the first person to be convicted for Libor-related offences as part of the Serious Fraud Office’s investigation.