Two Barclays traders found not guilty in Libor retrial

Ryan Reich is one of the defendants found not guilty

Two former Barclays traders have been acquitted by a jury of conspiring to rig Libor, which is used to set interest rates.

Ryan Reich, a 35-year-old American, and Greek national Stylianos Contogoulas, 45, were both freed in unanimous verdicts.

It was their second trial on a charge of conspiracy to defraud.

The first jury to hear their case failed to reach a verdict in July 2016, although four colleagues were jailed.

Jay Merchant was sentenced to six-and-a-half years, Peter Johnson and Jonathan Mathew were each jailed for four years, while Alex Pabon received two years and nine months. All four worked for Barclays.

The Serious Fraud Office (SFO) had accused Mr Reich and Mr Contogoulas of plotting with other Barclays staff between June 2005 and September 2007 to rig Libor.

Libor - the London interbank offered rate - plays a key role in the global financial system by setting a benchmark for rates on about $450 trillion of financial contracts and loans worldwide.

Libor: what is it and why does it matter?

Stylianos Contogoulas was also found not guilty

In a statement issued by his lawyer, Roland Ellis, Mr Contogoulas thanked the jury after what he described as a "trying ordeal for the past seven years".

"He has consistently maintained his innocence of any crime and is gratified that today's verdict has vindicated him," Mr Ellis said.

"The decision by the SFO to seek a retrial of my client after the jury had failed to reach a verdict following a four-month trial in 2016 was regrettable. We made strong representations to them that it was not in the public interest to do so and that the prospects of a conviction were slim," the lawyer continued.

"Unfortunately they chose not to accede to those representations. The speed with which the jury reached their verdicts today would suggest that those representations had considerable merit."

SFO prosecutor Emma Deacon declined to comment. The SFO noted the acquittals in a brief statement.

Mr Reich said he was "relieved and delighted" to have been acquitted.

"This trial was the first time that any jury has actually been asked to consider whether as a matter of fact any trader deliberately broke the rules or caused false Libors to be submitted. They rapidly rejected the SFO's case," he said.

'Real concern'

"There can be little doubt that, had the juries been properly directed in earlier trials, acquittals would similarly have resulted."

Mr Reich's lawyers said the jury heard evidence from senior managers at Barclays, who accepted that between 2005 and 2007 communications with the Libor submitter were permitted which created conflicts of interest, and that there was insufficient clarity and training as to what was and was not allowed.

"It is of real concern that the SFO has chosen to pursue Mr Reich and other junior traders for conduct that was widespread, tolerated and encouraged by senior figures in the industry at the time," they said.

The jury found both defendants not guilty within hours of being sent to consider their verdict.

Jonathan Pickworth, a lawyer at White & Case, which was not involved in the case, said the speedy acquittal "tells us all we need to know about what the jury thought of the prosecution case".

During the trial, the SFO's only banking industry expert admitted he had broken court rules by sending texts and emails to contacts, while giving evidence in court, to check he was answering basic questions correctly.

Tom Hayes was the first person convicted in the Libor scandal

The Libor rigging scandal erupted in 2012, when Barclays was the first bank to be prosecuted with a £290m fine, which sparked the resignation of chief executive Bob Diamond.

Royal Bank of Scotland, UBS, Deutsche Bank and broker Icap were also heavily fined for attempting to manipulate the rate.

In August 2015, Tom Hayes became the first individual to be convicted in the Libor scandal and was sentenced to 14 years in prison - later reduced to 11 years.

Six other traders - Darrell Read, Noel Cryan, Danny Wilkinson, Colin Goodman, James Gilmour and Terry Farr - were accused of aiding Hayes but were found not guilty in January 2016.

Thursday's verdicts mark an end to the SFO's current Libor trials.

It has also charged five men and one woman with conspiracy to defraud in connection with an investigation into the setting of Euribor, a Brussels-based euro benchmark.

The six, who deny wrongdoing, are due to stand trial in September.