Barclays Libor Suit List Shows Probe Spanned Diamond to Dearlove
Jan. 24 (Bloomberg) -- Barclays Plc senior executives, dozens of traders and the bank’s chief economist were all identified by regulators in a probe into interest-rate rigging that spanned continents, according to documents released in the U.K.’s first Libor-manipulation lawsuit.
Barclays is being sued by affiliates of Guardian Care Homes Ltd. claiming an interest-rate swap should be annulled because it is linked to Libor, which Barclays tried to rig. Judge Julian Flaux in London rejected a bid by a group of employees identified in the Libor documents to prevent their names from being published ahead of a trial later this year.
“The cat is out of the bag,” Flaux said rejecting the employees’ bid for anonymity earlier this week. “It wouldn’t take a rocket scientist to work out who they are.”
Among those identified in connection with the case were former Chief Executive Officers Robert Diamond and John Varley, and Jerry Del Missier, the bank’s former chief operating officer. The list of names, which Flaux said had to be turned over to Guardian, was compiled from evidence Barclays provided in the regulatory probes that led a 290 million-pound fine ($457.5 million) in June.
Jon Laycock, a spokesman for London-based Barclays, said people named in the hundreds of thousands of documents used in the investigation weren’t necessarily suspected of wrongdoing. Only 24 of the 104 employees on the list had any involvement in setting Libor, Flaux said on Tuesday.
Diamond and Del Missier, who resigned in the wake of the investigation and fine, were called to testify in front of British lawmakers last year about the extent of their knowledge of the rigging of the benchmark interest rate that is meant to reflect how much banks pay to borrow from each other.
Tom Gough, a spokesman for one of the law firms representing the Barclays employees, declined to comment. A spokesman for Diamond declined to comment.
Guardian says it wouldn’t have signed the swap contract, which resulted in a loss for Wolverhampton, England-based company, if it had known about the manipulation.
More than 200 Barclays employees were identified in documents given to regulators. Those who didn’t seek anonymity haven’t yet had their names released. More than a dozen banks worldwide are under investigation for rate-rigging. Regulators say banks may have submitted inaccurate borrowing estimates to appear financially stronger, or on the request of traders seeking to boost profits.
The Barclays list also includes Tim Bond, the former head of asset allocation strategy at Barclays’ investment bank. He publicly described Libor figures as “divorced from reality,” saying in a Bloomberg Television interview that firms were routinely misstating their borrowing costs to avoid the perception they were facing stress.
Mark Dearlove, head of the bank’s money-market desk and responsible for the bank’s Libor submissions, and Stephen Morse, former compliance chief, were also included. Del Missier told lawmakers that Diamond instructed him to submit artificially low Libor rates and “passed the instruction along” to Dearlove.
The list derived from the probe evidence included employees that worked at offices in cities including London, Singapore, Tokyo and New York. While most are traders, desk heads and executives, the list also includes Julian Callow, chief international economist at Barclays.
Messages left for Bond, Varley and Callow didn’t receive immediate responses.
Another executive who sought anonymity in the Libor case was Chris Lucas, Barclays’ group finance director. He is under investigation in a separate regulatory probe into payments made to Qatar’s sovereign wealth fund, the bank revealed last year.
Bloomberg News joined with other media organizations, including the Times in London, the Telegraph and the Financial Times in opposing the employees’ application for anonymity.
Dan Doctoroff, President and Chief Executive Officer of Bloomberg LP, has offered a measure dubbed the Bloomberg Interbank Offered Rate, or Blibor. It would use data from a variety of financial transactions in an effort to better reflect participating banks’ real cost of credit. Bloomberg LP is the parent of Bloomberg News.
--Editors: Christopher Scinta, Heather Smith