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Former Barclays trader found guilty of rigging interest rate

Reuters  |  LONDON 

By Ridley

LONDON (Reuters) - A French former with Barclays, tried in his absence by a London court, has been convicted of helping to mastermind a five-year plot to rig global interest rates after an 11-week trial.

Philippe Moryoussef, a 50-year-old former senior derivatives trader, was found guilty of conspiracy to defraud by dishonestly manipulating Euribor - or Euro interbank offered rate - between January 2005 and December 2009.

The jury at acquitted German Achim Kraemer, a Deutsche still employed by the

Reporting restrictions were lifted on Thursday after the jury failed to reach a verdict on three former co-defendants Carlo Palombo, an Italian-born former junior trader, Sisse Bohart, a Danish former and rate submitter and her British former boss,

A sixth defendant, 46-year-old former Deutsche star Christian Bittar, a Frenchman who investigators said was once one of the world's best-paid traders, pleaded guilty before the trial began. He is already in custody.

The UK's (SFO), which prosecuted the case, said it would decide within seven days whether to seek a retrial of Palombo, Bohart and Bermingham.

A conspiracy to defraud conviction carries a jail sentence of up to 10 years.

The SFO alleged bankers deliberately disregarded rules that Euribor should not be set with an eye on commercial gain, that they dishonestly plotted for rates to be false or misleading and risked prejudicing the economic interest of others.

Brussels-based Euribor is a benchmark for interest rates on around $150 trillion to $180 trillion of financial contracts and consumer loans worldwide.

SENTENCING NEXT WEEK

The pencilled in July 20 for sentencing Moroccan-born Moryoussef and Bittar, who was born in But as Moryoussef is not in the country, it is unclear whether or when he will serve time in jail.

The former trader left for after Bittar's guilty plea was made public and had no defending in court. His Paris-based lawyer, Francois De Casto, said his client was under the protection of French law.

"will eventually refer this case to the European Court of Human Rights," he said.

While global authorities have fined leading banks and brokerages around $9 billion and charged about 30 people over rate-rigging allegations, the latest SFO prosecution is the first to focus on Euribor, the Brussels-based equivalent of Libor (London interbank offered rate).

Prosecutors cast Bittar and Moryoussef, old friends who cut their teeth in at France's Societe Generale, as the ringleaders of an international, to deliberately flout rules by asking rate submitters to nudge rates up or down to bolster trading books in a "zero sum game".

Vast derivatives profits could ride on a basis point, or 0.01 percent, change in Euribor rates, which are set over various time frames.

"GOOD LUCK"

In messages read out in court, Moryoussef emailed Palombo on October 1, 2006, saying: "My mobile won't be connected on Monday. Two things, ask Sisse to put a high 6 month (Euribor)... and Christian as well ... we have 2 billion on that date. We definitely have to make one (basis point) on that fixing. Good luck, bye."

The defendants denied dishonesty, said they had learnt their trade on the job and that they believed there was nothing wrong with requesting or accommodating preferential trades.

Rate requests were made openly and fell within a range of equally valid rates, they said.

Defence lawyers also said there was no evidence their clients had financially benefited from the alleged scam.

In a statement read out to the jury during the trial, Moryoussef said trader requests were an established practice at when he joined in 2005 and that he believed submitters would choose a correct rate from a permitted range of estimates.

(Additional reporting by Emma Rumney, Editing by Silvia Aloisi/Keith Weir)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, July 12 2018. 20:03 IST
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