Accused ex-Barclays trader says he was just doing what he was trained to

Barclays Canary Wharf

A former Barclays trader accused of Libor-rigging related offences told the court today that email requests by staff for certain rates were indicative of what they were trained to do.

Jay Merchant, along with fellow former traders Stylianos Contogoulas, Alex Pabon and Ryan Reich and former Libor submitter Jonathan Mathew, is standing trial charged with conspiracy to defraud on allegations of conspiring to manipulate US-dollar linked Libor between June 2005 and September 2007.

When asked by his lawyer whether he considered email correspondence which requested that Libor be set at a certain point to be "improper", Merchant replied: "No, it's exactly what we were trained to do."

He later said of such communications with rate submitters: "If I had any idea this was dishonest and improper, I would have never have done it."

Merchant also said that it was his understanding that all the banks with Libor-submitting responsibilities accommodate requests from their swap desks and that such requests where just one of a number of factors the submitter would take into consideration.

He later added that he could not be entirely certain that his requests had been taken into account in the submitter's final rate. "I have no idea if he did or if he didn't in the end," Merchant said.

The former trader also explained that he only had a limited understanding of what the cash desk did, estimating that he didn't understand about "95 per cent" of what they did, and guessing that vice versa was true.

When being cross-examined by the prosecution, Merchant also confessed that his understanding of how Libor was set was very limited when he first started working in New York for Barclays. He explained that he only started to learn about Libor within his first couple of months in the role, remarking that, although having some knowledge of Libor formed part of his job, "there were many other tasks that were more important than that".

He did acknowledge, while being cross-examined, that he understood that even one submission could impact that final published rate.

Earlier on in the trial, the court heard from Eric Bommensath, former global head of fixed income at Barclays, who described such emails between staff as "improper".

Bommensath was giving evidence as the prosecution's witness, is not on trial and denies having knowledge of Libor-fixing activities.

Merchant was the highest paid of all the men on trial, taking home a total paypacket worth £2.2m in 2007.

The trial, which is ongoing and being heard at Southwark Crown Court, is the third brought by the SFO in relation to their ongoing investigation into Libor. The trial started in April.

Full story: Accused ex-Barclays trader says he was just doing what he was trained to: City A.M.

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