A federal judge on Wednesday said a former star Lehman Brothers Holdings Inc trader was not entitled to an $83 million (£64.4 million) bonus he claimed he was owed following the investment bank’s 2008 collapse, on top of a similar sum that Barclays Plc already paid him.
U.S. District Judge Lorna Schofield in Manhattan also said the former trader Jonathan Hoffman did not deserve $7.7 million that a federal bankruptcy judge had said he could recoup from the estate of Lehman’s brokerage unit, Lehman Brothers Inc, based on an unpaid instalment from his 2007 bonus.
Hoffman’s quest for additional pay is one of the largest lawsuits left in the wind-down of Lehman, whose Sept. 15, 2008 bankruptcy remains the biggest in U.S. history and helped trigger a global financial crisis.
Three former Barclays traders have been found guilty of conspiring to fraudulently manipulate global benchmark interest rates.
Jay Merchant, 45, a trader and the most senior of the men on trial, was convicted unanimously at Southwark Crown Court.
Former Libor submitter Jonathan Mathew, 35, and former trader Alex Pabon, a 38-year-old American, were found guilty by a majority verdict after the 10-week trial.
The Serious Fraud Office (SFO) claimed the men were dishonest when they submitted or asked colleagues to submit Libor rates that would benefit trading positions and prejudice the economic interests of others.
A London prosecutor told jurors they didn’t have to decide whether the banking industry as a whole is guilty of fraud, but just the five former Barclays Plc traders accused of manipulating Libor.
James Hines, a prosecutor for the Serious Fraud Office, made the argument Wednesday as he asked the jurors to disregard testimony by the five bankers that manipulation of benchmarks was an everyday occurrence, not only in the bank but also across the City of London.
“The banking industry isn’t on trial, it is a handful of dishonest traders,” Hines said on the second day of his closing argument.
Alex Pabon, Stylianos Contogoulas, Jay Merchant, Jonathan Mathew and Ryan Reich are on trial for conspiring to fix the London interbank offered rate, a benchmark tied to trillions of dollars in securities and loans, between 2005 and 2007. They face as long as 10 years in prison if convicted.
Merchant, in particular, said the culture of making the requests was fostered by senior managers at the bank despite there being no e-mail or documentary evidence they instructed traders to act dishonestly, Hines said.
A former Barclays Plc trader on trial for rigging Libor was admonished by the judge for an outburst that interrupted a co-defendant being questioned by a prosecutor.
Ryan Reich shouted “no, no, no, no,” from his seat on Friday after the prosecutor asked fellow ex-Barclays trader Alex Pabon on the stand if the Libor rate affected swaps valuations. After the interruption, Reich’s lawyer told him to be quiet and Judge Anthony Leonard said “interruptions should not take place.” Pabon answered that, yes, Libor did affect swaps valuations.
Reich and Pabon are on trial with former colleagues Stylianos Contogoulas, Jay Merchant and Jonathan Mathew for conspiring from 2005 through 2007 to fix the London interbank offered rate, or Libor, a benchmark tied to trillions of dollars in securities and loans. Another ex-trader, Peter Johnson, has pleaded guilty to the charge.
An ex-Barclays trader accused of fixing a key financial benchmark for personal gain stood to earn a bonus of only $172.50 for his role in alleged rate-rigging in 2007, a London court heard on Friday.
Adrian Darbishire, lawyer for Ryan Reich, one of five men on trial for conspiracy to defraud by manipulating U.S. dollar Libor rates between June 2005 and September 2007, shared the estimated sum with the jury, in response to prosecution allegations that huge sums were involved.
“So what’s the loot? What’s the possible cash incentive?” Darbishire said on the opening day of defence arguments.
Britain’s Serious Fraud Office (SFO) has alleged that Reich, Barclays’ former rate submitter Jonathan Mathew and ex-traders Stylianos Contogoulas, Jay Merchant and Alex Pabon dishonestly agreed to procure or make false or misleading submissions of rates into the dollar Libor-setting process.
The five men have pleaded not guilty. Each count carries a maximum jail sentence of 10 years.
A U.S. judge ordered Barclays Plc (>> Barclays PLC) to face a proposed class-action lawsuit in which a California water utility accused the British bank of illegally manipulating electricity prices in the western United States, causing purchasers to overpay.
U.S. District Judge Victor Marrero in Manhattan on Monday said the Merced Irrigation District can pursue two claims that Barclays violated federal antitrust law, and one claim that the bank violated a California unfair competition law.
In July 2013, Barclays was fined $435 million by the U.S. Federal Energy Regulatory Commission for allegedly manipulating electricity prices in California and other western U.S. states from November 2006 to December 2008.
Law360, New York (February 18, 2016, 10:59 AM ET) — Barclays PLC has agreed to pay $50 million to settle claims that it misused a system intended to block stale foreign exchange prices as a way to boost the bank’s profits while hurting clients, according to court documents filed Wednesday in New York federal court.
Along with the cash payout, Barclays has also agreed to provide information that the plaintiff, Axiom Investment Advisors LLC, believes will help pursue similar claims against other banks that engaged in similar so-called “Last Look” practices.
Such practices involved putting holds on…