Two London brokers charged in Libor case

July 15, 2013 at 2:28 PM
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LONDON, July 15 (UPI) -- British authorities said Monday they charged two former financial industry brokers with attempting to manipulate a benchmark lending rate known as the Libor.

The Libor is the London inter-bank offered rate and it is calculated by determining the average interest rate that banks charge each other for loans. Rates for trillions of dollars or personal and commercial loans are based on the Libor

Over a dozen U.S. and British banks are now being investigated for possibly manipulating their Libor reports to squeeze more profits from other transactions.

Britain's Serious Fraud Office said Monday they charged former R.P. Martin Holdings Ltd. brokers Terry Farr and James Gilmour with two and one counts of fraud, respectively, The Wall Street Journal reported Monday.

Gilmour, Farr and former UBS AG and Citigroup trader Tom Hayes were all arrested in December and the charges announced Monday underscore a peculiarity in the case. which is that while the fraud has been described as widespread, only a select few have been charged and those who have been, the Journal said, worked together.

Financial brokers are, essentially, middlemen, who arrange deals to sell bank products.

It was announced a year ago -- in July 2012 -- that British bank Barclays had agreed with British and U.S. authorities to pay $453 million to settle charges of Libor manipulation.

The banks UBS and Royal Bank of Scotland Group PLC later admitted to attempting to manipulate the lending rate, the Journal said.

When he was arrested in December, Hayes said, "This goes much higher than me."

Hayes has not yet entered a plea. Lawyers for Farr and Gilmour could not be reached Monday, the Journal said.

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