Ex-traders accused of Libor manipulation end legal action against Barclays

Maria Nikolova

Following an earlier settlement reached between Jay Vijay Merchant, Alex Pabon and Barclays, Ryan Michael Reich has also managed to clinch a settlement deal with the bank.

Another legal action related to Libor manipulation has been brought to an end, as the latest filings with the New York Southern District Court show that a case brought by former traders Jay Vijay Merchant, Alex Pabon and Ryan Michael Reich against Barclays Bank PLC and Barclays Capital, Inc. was dismissed with prejudice.

The end to the action comes after Ryan Reich, formerly a Manager at the New York Interest Rate Swap desk of Barclays, managed to reach a Confidential Settlement Agreement with the bank. The settlement has led to Reich’s dismissal of all claims against the defendants with prejudice. The relevant documents were submitted on August 17, 2017, with the court.

Jay Vijay Merchant and Alex Pabon had earlier settled and dismissed their claims against the bank – this happened in September last year.

So, what is (was) the case about?

In their complaint, published in September 2014, plaintiffs Merchant, Pabon and Reich, all former traders at Barclays, provide details on their participation in regulatory investigations and legal proceedings related to the alleged Libor manipulation by Barclays. Although the bank had covered the expenses associated with these proceedings until a certain point, in early May 2014, it advised the plaintiffs that it would stop paying their legal fees.

Reich, Pabon and Merchant accused Barclays of violations of the Dodd-Frank act and sought indemnification for their expenses in the regulatory and Serious Fraud Office proceedings.

Jay Vijay Merchant, Alex Pabon and Ryan Michael Reich were charged by the UK Serious Fraud Office (SFO) on April 28, 2014 with Conspiracy to Defraud. The charges relate to an SFO investigation into the manipulation of US Dollar LIBOR.

On July 4, 2016, Jay Merchant and Alex Pabon were convicted by a jury following an 11-week trial. The jury could not reach verdicts for two of their co-defendants, Stylianos Contogoulas and Ryan Reich.

Following their convictions, Jay Vijay Merchant and Alex Julian Pabon were sentenced to six and a half years and two years and nine months in prison, respectively. In February this year, Jay Merchant had his conviction upheld by the court of appeal but the court reduced his sentence to five and a half years.

Stylianos Contogoulas and Ryan Reich were acquitted by a jury of Conspiracy to Defraud charges at Southwark Crown Court in early April 2017.

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