A London court has given its verdict over four former Barclays PLC’s (ADR) (NYSE:BCS)’s employees who were implicated in various crimes that they carried out within the bank premises. Jay Merchant, 45, 38-year-old American Alex Pabon, Jonathan Mathew, 35 and 61-year-old Peter Johnson were sentenced to between 33 months and six-and-a-half years in jail. They were accused of plotting to manipulate global benchmark interest rates at the expense of the bank.
Barclays is not new to these kinds of scandals. Four years ago it was slapped with a hefty fine for their role in the rate-fixing scandal which triggered a criminal inquiry and pushing out of former CEO Bob Diamond.
Analysis of individual sentencing
At least all of them had one crime in common; the conspiracy to defraud the bank. Calcutta-born Merchant was sentenced to six-and-a-half years for a unanimous conviction. Pabon, who was Merchant’s junior, was sentenced to two years and nine months while Mathew, a junior British Libor submitter received a four-year sentencing.
According to Judge Anthony Leonard, the victims had abused the positions they had been entrusted with by their employer. Their actions ha tainted the bank’s integrity throwing off balance, yet it is one of the powerful banks in the industry.
The rise and fall of Peter Johnson
He was an old-school banker whom everyone referred to as “PJ”. The white-haired man described as a bully by most of his ex-colleagues was sentenced to four years. Apparently, he did not show any significant emotion even as his the prison terms were read out.
The Hull University graduate and a father of three hit the banking industry in 1981 starting with Barclays where he spent the next 30 years. He slowly climbed through the ranks to become director of the U.S. dollar book in London.
A lot of evidence of his intention to manipulate the London interbank offered rate was gathered from e-mails and phone calls to traders asking them to change his rate submissions.
In one particular conversation, he was quoted saying that the bids were becoming an “ethical and legal thing now because I’m patiently giving a false rate.” But all in all is no up in smoke, and he will have to face the jail term.