Porridge on the menu? Criminal trial for 5 former Barclays FX traders to be held this week

The Serious Fraud Office continues to bring criminal trials against interbank FX traders long after the regulatory censuring concluded with fines for some of London’s largest institutions totaling several billion for FX benchmark and LIBOR (London Interbank Offered Rate) manipulation.

In November 2014, authorities in the US, Britain and Switzerland issued major banks whose traders manipulated FX benchmarks with a collective $4.3 billion in fines, and several class action lawsuits ensued, however Britain’s law enforcement departments have now begun to bring their criminal investigations to court.

In a very high profile case recently, former Yen derivatives trader Tom Hayes was jailed for 11 years, having his initial sentence of 14 years shortened following an appeal. Following his incarceration, he was ordered to pay $1.2 million in restitution, the gavel falling on that particular court case last week.

This week signals the arrival in court of Jonathan Mathew, Stylianos Contogoulas, Jay Merchant, Alex Pabon and Ryan Reich, who the Serious Fraud Office alleges manipulated LIBOR rates between June 2005 and September 2007.

This is 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 will open today 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.

Clearly, whilst Britain’s regulatory authorities continue to convene in order to attempt to keep pace with technological and cultural change in the financial sector and ensure that the legal framework adapts and modernizes quickly – not an easy task as development cycles are so rapid these days that regulators have to attempt to introduce new laws within shorter times than in analog world under which they were established, Britain’s law enforcement agencies are coming down hard on those who go against the market benchmarks.