Two London brokers have been charged with conspiracy to defraud in connection with the Libor interest rate fixing probe currently in progress in Great Britain. Both men used to work as brokers at RP Martin Holdings in London.
The men, 41 year old Jerry John Farr, and 48 year old James Andrew Gilmour, were criminally charged in the Libor probe. The two criminal charges are the second and third cases brought against individuals for crimes committed in elation to the Libor scandal
List of guilty grows
R.P. Martin, where the two brokers worked, is a small player compared to some of the other companies who have already been indicted in the Libor case. Switzerland’s largest bank UBS AG (NYSE:UBS) admitted guilt in the case last December and paid a fine of $1.5 billion.
Thomas Hayes, a 33 year old trader who formerly worked at Citigroup Inc. (NYSE:C) and UBS AG (NYSE:UBS) was charged with eight counts of conspiracy to commit fraud. All three of the men who have been charged in the case so far were arrested last December.
It is unclear whether or not there will be any more charges brought against the players in the Libor scandal and there will be some disappointment about the lack of an executive title on the list of those charged. Popular anger is raised when a bank like UBS AG (NYSE:UBS) is able to admit guilt and pay a fine, with none of its leaders facing prosecution.
Today’s charges show that regulators have not forgotten about the case and are still actively pursuing it, but it seems unlikely that the financial institutions involved will end up paying anything close to the cost of the scandal to society at large, incalculable though that might be.
Libor reform brewing
Libor Reform is seen as a necessity after the revelations last year. There is a proposal on the table that will see the interest rate setting mechanism changed. The complexity of the move, and the current financial fugue the world is living through, make it difficult to come up with an efficient and stable way to set the base interest rate.
Despite that, the current mechanisms cannot be left as they are. They are clearly prone to corruption and manipulation. The charging of three players in the Libor scandal seems like a less than perfect solution to the problem.