Missing evidence raises more questions about Libor manipulation investigation

Maria Nikolova

The SFO could not get access to evidence concerning a meeting at a government department relating to Libor.

Questions have been piling up around the investigation into rigging of the London interbank offered rate (LIBOR) after a recording uncovered by BBC Panorama implicated the Bank of England and the British government into the manipulation.

Now, the ex-Labour government has to face more questions on the matter after a report by The Daily Telegraph says that a piece of evidence related to the LIBOR investigation was missing.

The piece of evidence in question is a handwritten note – a recording of a government department meeting related to LIBOR. The Serious Fraud Office (SFO) requested the note with regards to its investigation but were not provided with the original but only a typed version. The original had reportedly been destroyed.

A spokesman for the SFO said that “There was no question of any material we asked for being withheld or denied, or access to such material somehow having been restricted, and no question of our investigation being undermined by the unavailability of a note.”

However, the evidence disappearance triggers more questions about the role of the Labour government and civil servants into the setting of LIBOR.

For that matter, Sir Jeremy Heywood, who held senior positions in the previous Labour government, has been reported to have attended meetings where LIBOR setting has been discussed.

The secret recording played by BBC Panorama dates back to 2008 and involves a talk between senior Barclays manager Mark Dearlove and Libor submitter Peter Johnson. In the recording, Mr Dearlove instructs Mr Johnson to lower the Libor rates:

“The bottom line is you’re going to absolutely hate this… but we’ve had some very serious pressure from the UK government and the Bank of England about pushing our Libors lower.”

Last week, two ex-Barclays traders – Stylianos Contogoulas and Ryan Michael Reich, were acquitted of charges of Conspiracy to Defraud, with regards to a LIBOR rigging investigation. They were acquitted by a jury at Southwark Crown Court following a retrial.

Mr Contogoulas commented that playing the recording during the criminal trials might have had affected the outcomes. Tom Hayes, a former Citigroup and UBS trader who was convicted on eight counts of conspiracy to defraud in August 2015 and is now serving an 11-year sentence, called for an urgent probe after the BBC released the recording.

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