October 24, 2016

UK charges Euribor Six with six-year rate-rigging plot

Banker, Colin Bermingham leaves Westminster Magistrates court in London

Six French, German, British and Danish bankers, who have been charged in Britain with being part of a six-year scheme with traders at major banks to manipulate Euribor benchmark interest rates, are set to face a jury trial on Sept. 4, 2017.

Christian Bittar, once one of Deutsche Bank’s most profitable derivatives traders, Achim Kraemer, who is still at that bank and former Barclays traders Philippe Moryoussef, Carlo Palombo, Colin Bermingham and Sisse Bohart are charged with one count each of conspiracy to defraud between 2005 and 2011.

The UK Serious Fraud Office (SFO) alleges they conspired with others at Barclays, Deutsche Bank, Societe Generale and other banks to defraud by rigging Euribor, the Euro interbank offered rate, for profit.

Barclays and Deutsche Bank declined to comment. Societe Generale did not immediately respond to a request for comment.

At a hearing on Wednesday at London’s Southwark Crown Court, Judge Nicholas Loraine-Smith scheduled the first dates for the world’s first Euribor trial, which is expected to last around three months.

The group, aged between 37 and 59 and resident in countries from Singapore to the United States, is the first to be charged in relation to Euribor, the euro counterpart of the London interbank offered rate (Libor) – crucial benchmarks for around $450 trillion of financial contracts and loans worldwide.

A lawyer for Bittar has said previously he would contest criminal proceedings. Representatives of the others have declined comment.

An earlier initial hearing at a lower court ended in confusion on Monday. The SFO had planned to charge 11 bankers, but prosecutors found out at the last minute that five foreign nationals would not show up.

The SFO says it is still “considering its position” about how to proceed in its case against the five who did not appear, Germans Andreas Hauschild, Joerg Vogt, Ardalan Gharagozlou and Kai-Uwe Kappauf, and Frenchman Stephane Esper.

Wednesday’s hearing set a date of March 18 for the SFO to tell the court its plans for the bankers who did not appear.

“The prosecution is considering what if any steps to take in relation to those absent,” Prosecutor James Waddington said.

The SFO has confirmed that the foreign suspects had the right to refuse the initial summons to appear. A lawyer for Vogt noted the banker was not legally obliged to attend Monday’s initial hearing. Legal representatives for the other four did not respond to requests for comment about why they stayed away.

The six who did appear and were charged on Wednesday have been freed on bail.

Legal experts expect the SFO to seek a European arrest warrant as a precursor to attempting extradition proceedings against the other five.

Since a global investigation was spawned by US regulators in 2008, financial institutions have paid around $9.0 billion to settle regulatory allegations of rate rigging and around 30 individuals have now been charged.

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