Barclays Traders in Rigging Case Urged to Increase Their Risk

(Bloomberg) -- Barclays Plc managers drove traders to take on more risk in the years leading up to the financial crisis, according to evidence in the Euribor rate rigging trial in London.

Five bankers -- former Barclays traders Philippe Moryoussef, Colin Bermingham, Carlo Palombo and Sisse Bohart, and Achim Kraemer from Deutsche Bank -- are accused of trying to manipulate the euro interbank offered rate, or Euribor, between 2005 and 2009 to help their trading positions. They deny the charges.

Prosecutor Dominic Lewis on Wednesday read out excerpts of the appraisals of the former Barclays derivatives and cash traders.

The performance reviews show that Conor Brown, who oversaw the derivative traders, and Mark Dearlove, who was in charge of the cash desk, urged their team to be more aggressive.

Brown, Moryoussef’s manager, gave the trader the best rating in his 2006 review, saying he had “a great performance where you were always on top of your risk,” according to a copy of the appraisal presented to the jury.

In “the next year it’s critical you focus on" increasing the appetite for risk, Brown said in the document. “It’s clear to me that you have all the abilities and ambitions to achieve these goals, now it’s just about getting down and doing it."

A few months earlier, Brown told Moryoussef that he needed "to have more confidence," according to Lewis. Moryoussef worked at Barclays from 2005 to 2007.

Moryoussef is in France, and doesn’t have a lawyer representing him. A sixth, Christian Bittar, pleaded guilty before the trial started last month.

Moryoussef, in a mid-year self-appraisal in 2006, was happy with his performance after his profits reached 9 million pounds ($12 million), Lewis said. Moryoussef told Brown he had reduced mistakes, that he hadn’t yet had a negative month and he’d helped Palombo grow as a trader.

Brown’s comments for Palombo, if anything, were even stronger, as he encouraged the young trader to build a profile through “aggressive pricing” and “monetizing” his technical ability.

“It’s not enough,” Brown said in his 2007 mid-year review for Palombo, in which he “provisionally” gave him the top rating. “He’s a competent enough market maker. The next year you need to really push yourself so that when the next big book is available at Barclays you are in the frame.”

Between 2005 and the end of 2009, Palombo’s budget target went to 145 million pounds from 3 million pounds, the reviews showed.

In a mid-year 2007 review of Bermingham, a defendant who was a manager at Barclays’ cash desk, Dearlove said he was “disappointed by the lack of progress of Sisse Bohart,” who is also accused of misconduct for making improper submissions on Euribor.

“She’s not prepared to push herself,” Dearlove said. “She seems to lack the drive and ambition that I see in other traders. Colin needs to look for alternatives soon.”

To contact the reporter on this story: Franz Wild in London at fwild@bloomberg.net.

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser, Paul Armstrong

©2018 Bloomberg L.P.