Ex-trader wrongly convicted of rate rigging set to sue Barclays

A former Barclays trader whose conviction for rate rigging was quashed this week plans to sue the bank.

Jay Merchant was jailed in 2016 for conspiracy to defraud in connection with the alleged manipulation of the now-defunct Libor interest rate benchmark. He served two years of an initial six-and-a-half-year sentence.

Merchant and four other former Barclays traders succeeded in overturning their convictions this week after a ‘wrong turn’ led to unfair errors in their trials.

Merchant now plans to sue his former employer, which he says ‘still has serious questions to answer’.

He said: ‘Barclays trained, instructed and supervised us in the very practices that later on it distanced itself from. 

'Senior figures who knew how the system worked misled prosecutors and scapegoated junior employees - the managers who testified against me in court were the same ones who had trained us.’

Former Barclays trader Jay Merchant had his rate rigging conviction overturned this week

The Libor rate was previously used as a global benchmark for setting millions of pounds worth of financial deals, including car loans and mortgages.

The interest rate average was calculated from figures submitted by a panel of leading banks in London, with each one reporting what it would be charged were it to borrow from other institutions.

In 2012, the SFO began criminal investigations into traders it suspected of manipulating Libor and the European benchmark, Euribor. 

It brought prosecutions against 20 individuals between 2013 and 2019, seven of whom were convicted at trial, two pleaded guilty and 11 were acquitted.

Merchant claims Barclays ‘hid evidence so the truth was buried and we paid the price, along with our families. Those responsible for misleading the courts must now face justice and answer for the hidden evidence and false testimony.’

He added: 'Witnesses lied under oath while we told the SFO the truth in 2014, but nobody listened. We went to prison as innocent men and lost years of our lives. Barclays has a responsibility and I hope to hold them accountable.’

The decision to overturn the convictions of the five traders this week came after a Supreme Court ruling last July which overturned the convictions of two traders, Tom Hayes and Carlo Palombo.

Mr Hayes, who served five and a half years in prison, is suing his former employer, UBS, for at least $300million, alleging malicious prosecution. The Swiss bank is seeking to dismiss the complaint.

The Supreme Court found that the judge in Hayes’s trial gave the jury ‘directions which were legally inaccurate and unfair’. But he was not entirely exonerated, with the court finding that there remained ‘ample evidence’ for a properly directed jury to find Hayes and Palombo guilty.

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