Michael Bagguley, a prosecution witness in the trial of five former Barclays traders, denied any involvment in or knowledge of rate rigging
Senior Barclays executive Michael Bagguley told a London court that he had never sought to influence Libor benchmark interest rates, instructed others to do so, or seen any evidence of manipulation between 2005 and 2007.
Former Barclays traders Stylianos Contogoulas, Jay Merchant, Alex Pabon and Ryan Reich and former Barclays rate submitter Jonathan Mathew are standing trial after all pleading not guilty to one charge of conspiracy to defraud by manipulating US dollar Libor rates between June 2005 and September 2007.
In its third trial of individuals accused of rigging the London interbank offered rate, a benchmark for trillions of financial contracts and household loans, Britains Serious Fraud Office alleges the five men were dishonest when they asked colleagues to submit rates to benefit their trading positions.
Bagguley, who is chief operating officer of Barclays investment bank and was called as a prosecution witness, dismissed a suggestion he was denying knowledge of the alleged activity because he feared prosecution.
I suggest you did know and are simply denying it, Hugh Davies, a lawyer representing Merchant, told Wednesdays court hearing.
Bagguley, a 15-year Barclays veteran, also denied a suggestion that he only realised attempts to influence Libor rates were wrong after the bank launched an internal inquiry and settled regulatory allegations of wrongdoing in 2012.
Given your understanding of Libor at the time, I suggest you would not at the time have considered it improper, Davies said.
I would have done, replied Bagguley.
Davies also alleged that Bagguley had distanced himself from Merchant, described by Davies as a friend with whom Bagguley had regularly socialised in London and New York. They went on trips to Iceland, where they climbed volcanoes in 2002, Spain and Formula 1 motor racing events, Davies said.
Bagguley, who was Merchants direct supervisor for a time, described him as a work friend and the Iceland trip as a weekend away for a group that worked on the same desk. He said he hadnt communicated with Merchant since 2012.
You are distancing yourself from your friendship for obvious reasons, Davies said.
The prosecution told the court on 7 April that Merchant, the former line manager of Pabon and Reich, alleged in SFO interviews in March 2014 that his Barclays bosses, including Bagguley, had known of and approved the practice of seeking to influence the banks Libor rates.
Davies said the jury had been presented with files of evidence that showed various attempts by traders to influence rates openly, frequently and on corporate email accounts while Bagguley was a senior executive in New York.
But Bagguley said from the material he had seen during subsequent investigations that he was only aware of one such example, which involved Merchant.
Barclays declined to comment. The trial is scheduled to last 12 weeks.