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Ex-Barclays euribor traders jailed for as long as five years

[LONDON] Two former Barclays Plc traders convicted of manipulating a benchmark interest rate were sentenced to as much as five years in prison by a London judge who warned those still working in the finance industry that misdeeds would bring jail time.

Former swaps trader Carlo Palombo received a four-year sentence, while his former colleague on the bank's cash desk, Colin Bermingham, got a five-year term. They will both be eligible for parole after serving half of the prison time.

The charges against the two men relate to manipulation of the Euro interbank offered rate, which is related to trillions of dollars worth of loans and derivatives. In his remarks, Judge Michael Gledhill said Monday that he wanted to send a message to those in banking and finance, as well as punishing wronging by Palombo and Bermingham.

"Those convicted of manipulating interest rates will face substantial custodial sentences," Judge Geldhill said.

The lengthier sentence for Bermingham took into account that he brought former colleague Sisse Bohart into the conspiracy. She was acquitted of the charges.

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"But for you, she would never have become involved," Judge Gledhill said. "She looked to you as her mentor and you have badly let her down."

Lawyers for Palombo and Bermingham didn't immediately respond to requests for comment.

Last week's verdicts were a boost for the beleaguered UK Serious Fraud Office, which was frequently criticized for mishandling high-profile cases. The Euribor prosecutions were marred early on by multiple defendants refusing to come to the UK for trial and a mistrial regarding the three Barclays traders last year.

But the agency has still managed to rack up a significant number of convictions of prominent bankers. Former UBS Group AG Libor trader Tom Hayes, whose name became synonymous with banker greed, was found guilty in 2015, and another high flier, Deutsche Bank AG's Christian Bittar, pleaded guilty last year shortly before the first trial of Bermingham, Palombo and Bohart.

The Euribor rate is calculated with submissions from major banks and is meant to reflect the cost of borrowing between them. Palombo and Bermingham were accused of rigging the rate from 2005 to 2009.

"These men deliberately undermined the integrity of the financial system for personal gain and to advantage the banks they worked for," Lisa Osofsky, director of the SFO said in a statement. "We are committed to bringing those who defraud others to justice, regardless of how long ago the offences took place."


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