There was nothing secret or subtle about how traders at Barclays Plc tried to move the bank’s submission to an important benchmark interest rate in a way that helped their own positions, a former trader told a court Tuesday.
Co-workers would yell and collectively discuss their desire to move the bank’s Euribor position for their own benefit, according to Carlo Palombo, who is on trial for his role in manipulating the benchmark rate. He testified that an email he’d sent requesting a low three-month rate was normal practice for someone in his role.
Deutsche Bank, Barclays Traders Accused Of Rigging Euribor Rate Attend Trial
Carlo Palombo outside court in London on April 11, 2018.Photographer: Luke MacGregor/Bloomberg
“That trader would turn around and shout to the whole team, ‘Today I need a low three month,’” Palombo, 40, said during his second day of testimony. “Then if people say ‘Me too, me too,’ and something like that, then a request like this could be made.”
Palombo and former colleagues, Colin Bermingham and Sisse Bohart, are being tried for conspiracy to defraud related to their time at Barclays from January 2005 to December 2009. The three former Barclays employees deny the allegations.
Euribor, the Euro interbank offered rate, is tied to trillions of dollars worth of loans and derivatives. The figure is set by a poll of major banks, which give a rate that is meant to reflect the daily cost of borrowing money. The banks’ submissions are then averaged out to set Euribor.
Prosecutors at the U.K. Serious Fraud Office have said Euribor and other indexes were manipulated to benefit traders.
Palombo said he sought to change the bank’s submission at the request of his boss, Philippe Moryoussef, who was convicted last year for manipulating Euribor. Heads of the swaps desk, including Conor Brown and Clement Perrette, were aware that traders regularly made similar requests to benefit their positions, Palombo said.