Home News Two former senior bankers convicted of fraud in SFO’s EURIBOR manipulation case

Two former senior bankers convicted of fraud in SFO’s EURIBOR manipulation case

by Brian Sims

Two former senior bankers have been convicted for manipulating the Euro Interbank Offered Rate (EURIBOR) at the height of the financial crisis following a thorough investigation and subsequent prosecution brought by the Serious Fraud Office (SFO).

Phillipe Moryoussef, formerly of Barclays Bank, was found guilty by a Jury on 29 June. The conviction follows a guilty plea by Christian Bittar, former principal trader at Deutsche Bank, before the start of the trial in March this year. Former Deutsche Bank employee Achim Kraemer was found not guilty by a Jury on 29 June.

A Jury could not reach verdicts on Carlo Palombo, Colin Bermingham and Sisse Bohart, formerly of Barclays Bank. The SFO will inform the court whether it intends to proceed with a retrial by 20 July 2018.

Mark Thompson, director of the SFO, said: “The Jury has decided that Phillipe Moryoussef, alongside Christian Bittar who pleaded guilty before the trial began, dishonestly manipulated EURIBOR. In doing so, they damaged trust in an important system which sets the rates for $180 trillion worth of financial products. They were senior figures who abused their positions for personal gain and to advantage the banks for whom they worked.”

Global interest rates

The SFO’s case was that, between 2005 and 2009, the individuals manipulated EURIBOR, the benchmark by which global interest rates were hedged, in their favour with a view to making dishonest profits.

They conspired together to submit false or misleading EURIBOR submissions to benefit their positions and change the published rate. After discussing preparations for several months, the traders congratulated themselves in e-mails and other correspondence on their apparent success.

While ‘gaming’ the system, they spoke of the need to keep quiet about what they were doing and boasted of the money they made from the scam.

Substantial profits were made as EURIBOR was sent upward or downward based on their dishonest submissions. Bittar, for example, was a very successful trader in his own right, earning millions in terms of his salary and bonuses from Deutsche Bank between 2005 and 2009. So much so, in fact, that Deutsche Bank did a deal with him to reduce his income, yet still he felt the need to cheat. To that, he pleaded guilty.

Key financial benchmark rate

EURIBOR is a key financial benchmark rate used to set a range of financial deals around the world. It underpins no less than $180 trillion of financial products. The accuracy of the rate is hugely important when it comes to maintaining trust in the financial system.

The two convicted traders are due to be sentenced on Friday 20 July.

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