Trader Compares Being a Barclays VP to Working at McDonald's
(Bloomberg) -- A former Barclays Plc trader accused of rigging a benchmark interest rate downplayed his seniority at the bank, telling a London court that his job was comparable to working at a fast-food restaurant.
Being a vice president at Barclays is “the equivalent to the guy that serves you in McDonald’s,” Carlo Palombo said Thursday during his second day of testimony.
The 39-year-old is on trial with former Barclays traders Colin Bermingham and Sisse Bohart, as well as Achim Kraemer from Deutsche Bank AG. They all deny charges that they fixed the euro interbank offered rate, or Euribor, between 2005 and 2009. Palombo’s one-time boss, Philippe Moryoussef, is also on trial but isn’t attending the proceedings and isn’t represented by a lawyer.
Prosecutor James Waddington took issue with the statement, asking if “that’s a comparison that works.”
“Vice president is not what everyone thinks it is,” Palombo replied. “It is junior.”
Waddington told the jury that the former trader earned 1 million pounds ($1.35 million) in 2007.
“People do get paid a lot money” in banking, Palombo said. “If you want to have a conversation about income inequality, then let’s have a conversation about it.”
The investigation by the U.K. Serious Fraud Office, which is prosecuting the case, was part of a wider probe into benchmark rates, which are tied to trillions of dollars worth of derivatives and loans, the most famous of which was Libor, a counterpart of Euribor.
"You made an enormous amount of money by exploiting very small movements in interest rates," Waddington said to Palombo.
The trader countered that the profits were generated during the financial crisis, when interest rates moved about more significantly.
Palombo said he never tried to influence Euribor or that he did anything wrong in making submissions, though he did agree that he made requests in emails and online messages for a preferred rate to the cash desk.
“I made the requests for the book and for the team,” he said. “I made the requests on the instruction of the team.”
"If there was anything perceived to be wrong about this, these requests would’ve been made in secret, these requests would’ve been made in non-public ways," he said.
Palombo, a Milan native, started his Barclays career as a graduate in the summer of 2002 and worked on several teams before joining the euro short-end book as a junior trader.
Waddington asked that if the salary Palombo earned at that stage in his career wasn’t indicative of greater responsibility than he was letting on.
“You weren’t paid 400,000 pounds for being a tea boy, were you?” Waddington asked.
“It’s ridiculous, but I was,” Palombo replied. “As ridiculous as it sounds, a coffee boy at Barclays gets paid 400,000 pounds a year.”
In 2012, Palombo obtained a Masters degree in psycho-social studies at Birkbeck University in London. He’s currently working on a Ph.D. in California. Palombo said that the thing he liked most about trading was the mental side.
"The one thing I used to really love the most was the psychological aspects of trading and how it forced you to look into how your mind was working and thinking," he said.
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