Ex-Barclays swaps trader Ryan Reich ’04 is currently being prosecuted by the United Kingdom’s Serious Fraud Office for manipulating the London Interbank Offered Rate (LIBOR) for personal profit between June 2005 and September 2007, according to a trial update by BloombergQuint.
Reich is being prosecuted along with Greek Barclays trader Stylianos Contogoulas for rigging LIBOR. Contogoulas and Reich are not being prosecuted for conspiring together, as Contogoulas transferred to Merrill Lynch in July 2006, one month before Reich joined Barclays in August 2006.
The LIBOR is a key benchmark rate that the world’s top banks charge each other for interbank loans. It is used to calculate interest rates on various short-term loans between banks. Thirty-five separate LIBOR rates are submitted each day for five different world currencies and seven different maturities. Reich and Contogoulas are on trial for manipulation of the U.S. dollar LIBOR.
The U.S. dollar LIBOR is set each day by a panel of 16 submitters from 16 banks. Each submitter provides an estimate of what the LIBOR rate should be for the day, and the middle eight estimates are averaged to determine the rate that gets submitted.
Reich and Contogoulas’ manipulation of LIBOR rates entailed serving as middlemen between the Barclays’ U.S. dollar swaps trading desks and the U.S. dollar rate submitters in London, requesting specific rates that would make their own trading more lucrative.
Both Reich and Contogoulas have pled not guilty to charges of rigging LIBOR rates. According to Bloomberg, Reich claimed he thought he was simply helping submitters pick between multiple rates, instead of personally manipulating them.
According to Law360, Reich and Contogoulas are being prosecuted by Emma Deacon QC and Dominic Lewis of the English barrister firm 5 Paper Buildings on behalf of the Serious Fraud Office. Deacon’s main argument is that honesty and integrity were abandoned by the traders in pursuit of personal profits.
Deacon did not respond to requests for comment. Lewis declined to comment, citing a principle of not releasing details of ongoing court cases. However, he predicted that the case would be concluded by Easter, at which time more information would be available for release. The trial is expected to last around eight weeks.
Reich is being defended by QEB Hollis Whiteman barristers Adrian Darbishire QC and Tom Doble. Neither Darbishire nor Doble responded to requests for comment.
Contogoulas is being defended by 6KBW College Hill barrister John Ryder QC, as well as Five St. Andrew’s Hill barristers James Fletcher and Karl Masi. Ryder, Fletcher, and Masi all did not respond to requests for comment.
According to his LinkedIn profile, Reich left Barclays in 2010 after serving as a vice president. Prior to working for Barclays, Reich worked as an analyst at Citigroup from 2004 to 2006. Reich is now a founding partner at RSW Investments, LLC, a portfolio management service based in Summit, N.J.
While at the University, Reich concentrated in economics. On campus, he was also co-captain of the varsity baseball team and a member of Cottage Club.
