“The Cartel” hits back! Convicted interbank traders hit back at Serious Fraud Office over LIBOR manipulation

Former Barclays trader Alex Pabon and ex-Citi and UBS Yen derivatives Trader Tom Hayes, both serving sentences for LIBOR manipulation, have slammed the methodology used by the Serious Fraud Office in two damning letters

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Porridge has been on the menu every day for almost a year for former interbank trader Tom Hayes, who was an instrumental member of “The Cartel”, a group of professional traders who, according to court rulings, collaborated in order to manipulate the LIBOR rates whilst employed in senior positions on trading desks within major financial institutions.

Mr. Hayes, the London-based former Citi and UBS Yen derivatives trader who became a prominent figure within the criminal investigations into FX rate rigging within interbank desks last year due to the somewhat controversial ruling against him in August in which he was found guilty of eight charges of conspiracy to defraud for his part in the LIBOR rate rigging scandal, consigning him to 14 years in jail, the grip of the authorities is tightening even further.

The case brought against Mr. Hayes was a very high profile one indeed, and was orchestrated by the Serious Fraud Office (SFO), led by David Green, who gave evidence to the Justice Select Committee last month on, among other things, his agency’s performance in the LIBOR trials.

As a result of further Serious Fraud Office investigations, April this year signaled the arrival in court of Jonathan Mathew, Stylianos Contogoulas, Jay Merchant, Alex Pabon and Ryan Reich, who the Serious Fraud Office alleged manipulated LIBOR rates between June 2005 and September 2007.

That was the third criminal trial of this nature brought about by the Serious Fraud Office, and, as with many of these particular cases, is likely to be a long, drawn out affair.

The case opened on April 4 this year at Southwark Crown Court, and will be heard by Judge Anthony Leonard QC, a very prominent juror in the UK, having presided over cases involving top media entities and high profile celebrities.

Today, some of the traders concerned have issued a scathing damnation of the Serious Fraud Office’s activities.

and, led by Mr Hayes whose lawyer at the time of his sentencing stated that Mr. Hayes was denied a fair trial, now challenges the Serious Fraud Office’s method of convicting the traders.

In a letter which was presented to British news source City A.M., Mr. Hayes, the first person to be found guilty by a jury in the UK for his role in the Libor rigging scandal, has argued Green’s version of events was not an accurate depiction of his trial.

“I believe that your evidence before the Justice Select Committee was misleading,” Hayes wrote, adding that he found Green’s suggestion the decision the jury at his trial was asked to make revolved around issues of just dishonesty to be “frankly astonishing”.

Separately, Julie Pabon, wife of convicted ex-Barclays trader Alex Pabon, said she was “outraged” by Mr Green’s testimony to MPs, adding the proposition that the key issue in her husband’s trial had been one of honesty and dishonesty was “untrue”.

In particular, the two letters take issue with Green’s remarks that the traders had been prosecuted because the evidence had lead his agency in their direction, to which Mr Green stated when addressing British members of Parliament “We don’t go after the people. We go after the evidence and we go after the people the evidence points to.”

According to these reports, both letters, authored by Mssrs Pabon and Hayes were extremely damning with regard to how Mr. Green handled the convictions. “Since you have not been given access to all of the available evidence, on what basis are you selecting prosecution targets?” asked Mr. Hayes in his letter.

Mr Pabon added: “It is obvious that the SFO merely relied on the results of Barclays’ self-serving investigation to form the basis of the criminal prosecution of my husband and others.”

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