Ex-Trader to Sue Barclays After Rate Rigging Conviction Quashed
Jay Merchant, who served two years of a six-and-a-half-year sentence for Libor manipulation, plans legal action against the bank.
A former Barclays trader, Jay Merchant, whose conviction for rate rigging was overturned this week, intends to sue the bank. Merchant was jailed in 2016 for conspiracy to defraud in connection with the alleged manipulation of the London Interbank Offered Rate (Libor), a benchmark used for financial products worldwide.
Merchant served two years of an initial six-and-a-half-year sentence before his conviction, along with those of four other former Barclays traders, was quashed this week. The traders' legal teams argued that 'unfair errors' occurred during their trials. Merchant stated that Barclays trained, instructed, and supervised the traders in practices the bank later distanced itself from, and that senior figures misled prosecutors while scapegoating junior employees.
The Serious Fraud Office (SFO) began criminal investigations into suspected manipulation of Libor and the European Interbank Offered Rate (Euribor) in 2012. These investigations led to prosecutions against 20 individuals between 2013 and 2019. Of those, seven were convicted at trial, two pleaded guilty, and 11 were acquitted.
Merchant alleges that Barclays "hid evidence so the truth was buried and we paid the price, along with our families." He claims witnesses lied under oath, and that the SFO did not listen to his account in 2014, resulting in innocent men losing years of their lives. He expressed hope to hold Barclays accountable for its role.
The decision to overturn the convictions of the five traders follows a Supreme Court ruling in July that quashed the convictions of two other traders, Tom Hayes and Carlo Palombo. Hayes, who also served time in prison, is suing his former employer, UBS, for at least $300 million, alleging malicious prosecution. UBS is reportedly seeking to dismiss this complaint. The Supreme Court had found that the judge in Hayes's trial provided legally inaccurate and unfair directions to the jury, though it also noted ample evidence might have led to a guilty verdict from a properly instructed jury.