Six Ex-Brokers Acquitted Of Libor Rigging

Legal experts call for legislative change to aid SFO investigations

28.01.2016

Regulatory and criminal investigations experts at Irwin Mitchell have called for legislative change to aid the SFO investigations following the acquittal of six Libor traders. 

The six ex-brokers accused were acquitted of helping Tom Hayes, who is currently serving 11 years in prison for conspiracy to defraud, after becoming the first individual to be found guilty of rigging the interbank lending rate. 

Libor is used as the basis for hundreds of trillions of dollars of loans and transactions around the world from complex derivatives to mortgages. 

It is a benchmark that indicates the interest rate that banks charge when lending to each other. 

During the four month trial at London's Southwark Crown Court, the six traders were accused of helping Hayes by interfering with the rate in order to boost his own earnings. The men worked for the financial firms Icap, Tullett Prebon and RP Martin. 

Five defendants Noel Cryan, 49, of Chislehurst, Danny Wilkinson, 48, of Hornchurch, Colin Goodman, 53, of Epsom, James Gilmour, 50 of Benfleet, and Terry Farr, 44, of Southend-on-Sea were all found not guilty on Wednesday. 

Darrell Read, 50, of Wellington, New Zealand was found not guilty of two charges today. 

David Green, director of the Serious Fraud Office (SFO), said: “The key issue in this trial was whether these defendants were party to a dishonest agreement with Tom Hayes. By their verdicts the jury have said that they could not be sure that this was the case. Nobody could sensibly suggest that these charges should not have been brought and considered by a jury.”

Expert Opinion
“Whilst the SFO in light of these acquittals should review the evidence and realistic prospects of success on their outstanding benchmark investigations, particularly those against brokers, traders and rate submitters, they should focus on pushing the Government for legislative change to make their job easier.

“They are sometimes left with prosecuting more junior and peripheral individuals with the result, as in this case, that all have been acquitted fairly quickly by a jury, rather than being able to focus on corporate criminal responsibility.

“One of the difficulties for the SFO in getting successful criminal prosecutions off the ground against corporates are the legal technicalities around the ‘controlling mind’ test. If the criminal law was changed to one of ‘vicarious liability’ for corporate criminal wrongdoing, the SFO could focus their time and limited resources prosecuting more corporates where there is evidence of criminal activity albeit not evidentially at the board level.

“Other legislative changes might also include the introduction of a new criminal corporate offence for failure to have adequate procedures in place to prevent financial crime – a proposed new criminal offence that was wrongly shelved by the Government.”
Sarah Wallace, Partner