Multiple financial institutions have been hit with civil penalties surrounding the ongoing London interbank offered rate, or Libor scandal, but criminal cases have been kept to a minimum. However, new criminal charges against three former Barclays bank traders could be the beginning of a new area of interest in the case.

On Feb. 17, the U.K. Serious Fraud Office charged the three former traders with conspiracy to defraud in the scheme that rigged benchmark interest rates. According to the Wall Street Journal, three former brokers from ICAP are also likely to soon be charged in connection with the case.

These criminal charges are not the first in the case, as ten people had previously faced criminal charges for Libor-related fraud. However, all of the previous criminal charges were against an alleged rate-manipulation ring led by a single trader: former UBS and Citigroup employee Tom Hayes.

With these new charges, however, U.S. and British authorities that have been investigating the case may now be opening up a new front in the case. The three former Barclays traders — Peter Johnson, Jonathan Mathew, and Stylianos Contogoulas — do not appear to have any connection to Hayes. Instead, their alleged fraud occurred during a different time period, according to the WSJ.

Barclays itself was hit with a $450 million settlement in June 2012 in connection with the Libor case. Among other allegations, U.S. and British authorities charged Barclays with “[m]aking submissions that formed part of the LIBOR and EURIBOR setting process that took into account requests from Barclays’ interest rate derivatives traders, who were motivated by profit and sought to benefit the bank’s trading positions.”

At the time of the Barclays settlement, Tracey McDermott, the FSA’s director of enforcement and financial crime, said in a statement, “Barclays’ misconduct was serious, widespread and extended over a number of years. Firms making submissions must not use those submissions as tools to promote their own interests.”

The allegations at the heart of the Libor scandal center on collusion between multiple banks. Authorities believe that the banks implicated within the case manipulated Libor for mutually shared greater profits, often using chat rooms and other outside sources to work together in manipulation.


For more on the ongoing Libor investigation, check out these InsideCounsel articles:

Barclays reveals massive increase in litigation provisions

Investigation into foreign exchange rate manipulation heating up

Litigation claims cause Barclays CEO to refuse 2013 bonus in best interest of bank

European Commission fines six companies for Libor manipulation