Indian-origin trader jailed for libor-rigging scandal

An India-born trader was among four former Barclays bankers who were today jailed by a UK court for rigging global benchmark interest rates, known as Libor.
45-year-old Jay Merchant received the maximum 6.5 years jail term, while Jonathan Mathew and Peter Johnson were each jailed for four years and Alex Pabon got two years and nine months, Britain's Serious Fraud Office said.
Merchant was convicted unanimouslyat the end of a 10-week trial at Southwark Crown Court along with 35-year-old Mathew and 38-year-old Pabon for the Libor - or the London inter-bank offered rate - rigging scandal between 2005 and 2007.

Johnson had already pleaded guilty so did not have to stand trial.
"The jury has characterised your behaviour as dishonest, as you must have known that it was," Judge Anthony Leonard said during sentencing today.
Libor is used by banks to set prices of financial products and forms the base for trillions of pounds worth of loans and financial contracts for households and companies across the world.

Between 2005 and 2007, 16 banks, including Barclays, submitted daily estimates of borrowing rates to the British Banker' Association, which used them to calculate Libor.
The trial jury heard the ability to organise even minor movements in the rate had the potential to generate large profits for a trader.

Theprosecution had claimed that Merchant was among four traders who asked Libor rate submitters, Jonathan Mathew and Peter Johnson, to put in rates that suited their trading at the daily setting of Libor.
The bankers had argued that they should not be found guilty because they did not know they were behaving dishonestly and so did not meet the legal definition of fraud.
The jury was unable to reach a verdict in relation to two other defendants, Ryan Reich and Stelios Contogoulas.
The UK's Serious Fraud Office (SFO) will decide whether to call a retrial for them.
This was the third case to be brought by the SFO into Libor manipulation.

The only previous Libor-related conviction was that of Tom Hayes, a former UBS and Citi trader who was jailed for 14 years last year, a sentence that was cut to 11 years on appeal.
Libor manipulation instances emerged nearly four years ago and Barclays itself had to pay 290 million pounds in fines in relation to the scandal.