The Serious Fraud Office has fined a pair of former Barclays traders, who were handed jail terms totaling more than nine years for manipulating Euribor rates submissions, a total of £1.2 million ($1.6 million).
Carlo Palombo and Colin Bermingham were jailed in 2019 over allegations they plotted with a cartel in the euro swaps markets to rig Libor, the mechanism used to set interest rates. Palombo, sentenced to four years, was former vice president of Euro rates while Bermingham, who was sentenced to five, served as Managing Director at Barclays.
They were among a dozen bankers that have been convicted on Euribor rate-rigging charges in Britain in a series of prosecutions brought by the Serious Fraud Office, which ultimately prompted an overhaul of the UK’s rate-setting rules. Prosecutors alleged that bank traders dishonestly manipulated the rate to benefit their own trading positions, nudging them up or down while ignoring rules that they should be set independently.
A final notice issued by the SFO said: “HHJ Gledhill ordered Colin Bermingham to pay prosecution costs of £300,000, within 24 months and ordered Carlo Palombo to pay prosecution costs of £725,000 within 24 months. Palombo was also ordered to pay a confiscation order of £182,000 within three months, or he will face a 30 month default sentence.”
The Participants in Forex Trading and their Role in the MarketGo to article >>
Palombo and Bermingham challenged fine judgment
In a prosecution brought by the Serious Fraud Office (SFO), they were accused of conspiring with others at Deutsche Bank, Barclays, Societe Generale and other banks between 2005 and 2009. They allegedly created a chat group to defraud in relation to manipulating Euribor, the European interbank lending rate, seeking an edge over counterparties in a five-year rate-rigging plot, UK prosecutors said.
The men have contested the amount of money that the SFO is seeking to satisfy a possible confiscation order. They also claimed there was no personal gain to them from accepting requests from traders to put in higher or lower submissions.
But the court ruling states they were allegedly found to have routinely helped their London-based Deutsche Bank colleague to change the rates they submitted in order to benefit their positions. However, their DB colleague had his convictions overturned by the UK court on the grounds that the jury looked at the same evidence and decided not to bring charges, citing insufficient proofs for a realistic prospect of conviction.