Four Barclays’ Traders Given Steep Jail Sentences for LIBOR Abuse
Jay Merchant, Peter Johnson, Jonathan Mathew, and Alex Pabon are heading directly to prison after a UK judge's ruling.
The dust may have started to settle with a string of London interbank offered rate (LIBOR) probes that have extended back over three years now, though that does not mean regulators are not still in the process of cracking down on individuals who manipulate LIBOR rates. A total of four former Barclays’ traders were consequently slapped with prison sentences for their involvement in the scandal, which continues to result in harsh penalties for financial wrongdoing.
According to a recent Bloomberg report, Jay Merchant, Peter Johnson, Jonathan Mathew, and Alex Pabon each received jail sentences for white-collar crime, ranging from just under three years to over six. The LIBOR rigging scandal managed to engulf the financial services industry over the past few years, which resulted in record fines for leading banking institutions.
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By extension, traders have now felt the latest brunt of the regulatory hammer, in the form of harsh penalties and jail time. Merchant was given a 6.5 year sentence by UK judges today, while Johnson and Mathew each received four years in prison – Pabon will serve a total of thirty-three months in jail.
The sentences follow after similar crackdowns at UBS and Deutsche Bank – the former UBS trader Tom Hayes is presently serving an eleven-year prison sentence for LIBOR rigging, which has largely snuffed out most guilty parties at several institutions.
Regarding the four recently convicted individuals, each of the four Barclays bankers were ultimately accused of participating in a conspiracy to help manipulate LIBOR between 2005 to 2007.
The irony of the LiBOR scandal fallout is that nothing has been done to prevent it from happening again. The LIBOR is still calculated the same way as it was before. So it is ripe for rigging once people’s attention is off of it.