'They should be treated as the criminal scum that they are', says investment director on Libor trial

'They should be treated as the criminal scum that quite frankly they are', says investment director on Libor rigging trial

Former Barclays employee Jay Merchant, who will be sentenced on Thursday

Tuesday, July 5, 2016

Three former Barclays employees have been convicted of rigging the Libor interest rate between 2005 and 2007, and Seven Investment Management director claims they "should be treated as the criminal scum that quite frankly they are".

Jonathan Mathew, Jay Merchant and Alex Pabon will be sentenced on Thursday. Two other defendants, Ryan Reich and Stelios Contogoulas, have not been sentenced yet as the jury were unable to reach a verdict.

Libor stands for London inter-bank offered rate.

Justin Urquhart Stewart explains more.

"Basically it is the rate at which the banks will lend between themselves," he told Julia Hartley-Brewer. "Libor is the chicken stock of the financial services system, from this base rate comes everything else.

"Someone would say the average of [other bank's rates] is going to be x, so that's the figure we're working from today.

"Effectively manipulating the rate, albeit short-term rates, it may just be overnight or a week or so, they've actually taken a position to borrow money at one rate and fix the rate on the other side."

The stockbroker revealed why he thinks they should have a severe punishment.

"This is the reputation of the financial services, it's the reputation of London and it's the reputation of Britain internationally, and we have been besmirched, so they shouldn't just be fined. 

"This is not just white collar crime, this is criminal activity they should be treated as the criminal scum that quite frankly they are," he explained.

"They're not just to blame, their managers who blatantly did not understand what was going on, in which case they shouldn't be in the job, or were at least in collusion to it.

"I worked for Barclays and one of the reasons that myself and my business partner left as because of investment issues that we thought were wholly inappropriate."