(Bloomberg) -- A trader accused of illegally manipulating a key interest rate was only a bit player in a conspiracy run by more experienced bankers who used French to help obscure their actions, his defense attorney told a London court.
Sean Larkin, the attorney for ex-Barclays Plc trader Carlo Palombo, said Tuesday his client was 25 and in his first banking post when he joined the lender, where prosecutors allege he took part in a scheme to fix the Euribor rate with workers at Deutsche Bank AG, Barclays and Societe Generale SA.
Palombo and four others are on trial in London on charges of criminally manipulating the euro interbank offered rate to their own benefit between 2005 and 2009. The investigation was part of a wider probe into benchmark rates, which are tied to derivatives and loans, the most famous of which was Libor, a counterpart of Euribor. They deny the accusations.
Deutsche Bank star trader Christian Bittar, Barclays’ Philippe Moryoussef and Societe Generale’s Stephane Esper used French in their electronic messages to discuss moving the rate to benefit their trading positions, Larkin said. Bittar, who had been a sixth defendant in the case, pleaded guilty, while Moryoussef is not attending the trial and doesn’t have a lawyer at court. Esper is in France, which has refused to extradite him.
While Palombo, 39, worked for Moryoussef and sat next to him at Barclays, he was unaware of his boss’s activities, because the secrets were contained within the close-knit group, Larkin said.
“They are friends, they are French, in banking terms they’re a generation above Mr. Palombo," Larkin said, adding that Bittar and Moryoussef went skiing together. "Here are the big fish."
Lawyers for Colin Bermingham, 61, whose job was to ensure Barclays had enough liquidity, and Sisse Bohart, 41, who submitted the Euribor figures for Barclays, echoed Larkin’s claim that Bittar, Moryoussef and Esper misled the remaining defendants. Bohart is accused of fraudulently altering her submissions to match requests from traders, while Bermingham faces accusations of buying or selling reserves to influence the rates, something his lawyer denied.
"Mr. Moryoussef, who I do say was dishonest, would brag and boast from time to time, about what he had made the treasury desk do," Clare Sibson, Bermingham’s lawyer, said. "Mr. Moryoussef was lying."
Bohart’s lawyer Amanda Pinto said her client "was kept in the dark, used, lied to and lied about. She had no idea that such a thing was going on."
Palombo sat in the front row of the court, with Bermingham, Bohart and Achim Kraemer, the fourth defendant, sitting next to each other behind him. Palombo and Bohart both started at Barclays without banking experience in their 20s, worked their way up and only did what was permitted by their employer, their lawyers said. Both sat right next to their boss and never thought they could get away with any misconduct, they said.
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