‘Lord Libor’ and five others accused of ‘corrupting’ rate at fraud trial

The six were key middlemen in a scheme orchestrated by convicted trader Tom Hayes

The six were key middlemen in a scheme orchestrated by convicted trader Tom Hayes. Hayes was jailed for 14 years at Southwark Crown Court in August (Getty Images)

Six brokers revelling in nicknames such as “Lord Libor”, “Big Nose” and “Sarge” conspired to manipulate a key bank lending rate for personal reward, a London court has heard. They acted “to corrupt a process that should not have been corrupted”, a jury at Southwark Crown Court heard.

The six were key middlemen in a scheme orchestrated by convicted trader Tom Hayes to interfere with the critical financial process of setting borrowing rates in order to help Hayes and other traders working for major banks make millions in profits, the court heard.

“You don’t have to be a banker to understand it,” prosecutor Mukul Chawla, QC, told the jury. Dishonesty “is an ordinary everyday word that has the same meaning inside the court as outside it”.

Noel Cryan, 49, of Chislehurst, Kent; Darrell Read, 50, of Wellington, New Zealand; Danny Wilkinson, 48, of Hornchurch, Essex; Colin Goodman, 53, of Epsom, Surrey; James Gilmour, 50 of Benfleet, Essex; and Terry Farr, 44, of Southend on Sea, Essex, are accused of conspiring to defraud by trying to manipulate the Libor rate linked to the Japanese yen. All six deny the charges.

The brokers, who worked for City firms Icap, Tullet Prebon and RP Martin, became involved in the scheme for reward, the court was told. “The motivation in each case was a simple one: financial.” They were “rewarded in various ways”, Mr Chawla said.

Libor – the London interbank offered rate – is based on daily submissions from several of the world’s largest banks, which estimate their borrowing costs each day at 11am in London. The key rate is then used to set interest rates on thousands of financial products from mortgages to loans across the world. It has been described as the most “important number in the world”.

Brokers, who line up buyers and sellers, don’t contribute to the rate or directly benefit from where it is set, but the men stand accused of using their central position to help influence the rate on behalf of clients who rewarded them.

Mr Chawla said they were all recruited into a “dishonest scheme” by Hayes and they all helped him to “cheat” those Hayes had entered into trades with. “If you can rig the rate, you can move the odds in your favour and that’s what this is about.”

He said it was “cheating” – “nothing more, nothing less”, adding: “There’s nothing magical about it. There’s nothing very difficult about it.”

“Each of these six defendants were brokers, middlemen, willing and enthusiastic to lend themselves to Mr Hayes’ dishonest scheme,” Mr Chawla told the jury.

The court heard that Mr Goodman’s nickname was “Lord Libor”, Mr Read was known as “Big Nose”, while Mr Wilkinson, their boss, was known as “Sarge”.

Hayes would figure prominently in the trial but was not in the court, Mr Chawla told the jury. “Mr Hayes is not in the dock – for the simple reason that he has already been tried and found guilty of offences for conspiracy to defraud,” he added.

Hayes was jailed for 14 years at Southwark Crown Court in August. It is understood that he is appealing his conviction and sentence.

The trial continues.