Three former Barclays employees who are on trial for allegedly rigging the Euribor interest rate were part of an “elite” group of traders who gamed the financial system for personal gain, a court has heard.
James Waddington QC, representing the Serious Fraud Office (SFO), told Southwark Crown Court that Sisse Bohart, 41, Carlo Palombo, 40, and 62-year-old Colin Bermingham were among the bank’s “intelligent, competitive and ambitious employees” who cheated the financial system to give themselves an “edge on what was otherwise their honest and lucrative deals”.
The SFO has accused the defendants of conspiring with former Barclays trader Philippe Moryoussef and former Deutsche Bank star Christian Bittar between 1 January 2005 and 31 December 2009 to submit “false or misleading” rates for Euribor, a rate banks rely on to lend each other money.
Waddington claimed some of the bigger banks that were engaged in interest rate trading “employed traders who saw the banks’ role in setting rates … as a further and illegitimate business opportunity for themselves”, adding that they tried to influence the interest rates to “suit their own pockets”.
He told the court that the convictions of Bittar and Moryoussef – whom he described as the “prime movers in the fraud” – was proof there was a conspiracy to defraud, but that the jury must now decide whether Palombo, Bohart and Bermingham were party to that conspiracy.
All three defendants have pleaded not guilty.
The prosecution alleged that traders Palombo and Moryoussef relied on Bermingham and Bohart to submit rates that suited “ongoing transactions with which they had engaged in”, in a way that “undermined the whole system”.
Waddington likened the rigging to high-stakes gambling: “It’s as if the casino has made the zero on the wheel a bit wider than the others to make it a little more likely that the ball will fall in that place than any other on the wheel,” he said. “If the casino knows that but the players don’t, then that is cheating.”
The trial continues.