Ex-Barclays Trader Says Boss `Afraid' to Let Him Manage Book
(Bloomberg) -- A former Barclays Plc trader on trial for rigging a key interest rate continued to stress that he was a junior employee, saying that his boss wouldn’t take vacations or even smoking breaks because he was “scared” to leave him in charge of the trading book.
Carlo Palombo, who is testifying in a London court for a third day, said that his manager, Philippe Moryoussef, didn’t give him any opportunities to make decisions on his own when he was a junior trader in 2006 and 2007.
“He was afraid of leaving the office because he was afraid I would make a mistake,” the 39-year-old Palombo said. “He would wait until 4 o’clock to go out and smoke a cigarette because he didn’t want to leave me.”
Palombo and Moryoussef are among five traders from Barclays and Deutsche Bank AG on trial on charges that they fixed the euro interbank offered rate, or Euribor, between 2005 and 2009. While they all have pleaded not guilty, Moryoussef isn’t attending the trial and isn’t represented by an attorney at the proceedings.
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.
Palombo said that if there was any inappropriate conduct, it was part of the “culture at Barclays.”
“My involvement with Euribor setting was minimal, marginal, because I found myself on the team doing these things,” he said. “I did not see anything wrong because it was the culture at Barclays to make these requests.”
Prosecutor James Waddington asked Palombo if there was anything wrong with getting three banks together to fix a rate.
Palombo said the requests he got “were completely fine.”
“I just sent a message,” he said. It didn’t seem “wrong.”
Palombo said he would keep in touch with Moryoussef, after his boss went to another bank in 2007.
“We would sometimes have a chat and talk about the market.”
Former Barclays traders Colin Bermingham and Sisse Bohart, as well as Achim Kraemer from Deutsche Bank AG, are also part of the trial, and all deny the charges.
Waddington asked Palombo about an email he sent to Bohart after Moryoussef left. Palombo asks in the email where she thinks the Euribor submission will come out and she replies “your wish is my command.”
Palombo replied that he was merely asking for information.
“As swap traders we needed to have a good idea of where the fixings will come,” he said, and that’s why he emailed her.
Bohart replied in an email “I’ll see if I can tweak it.”
Waddington asked if that meant Bohart was tweaking the rates in his favor. Palombo said that wouldn’t have helped him on that trading day.
Waddington asked Palombo why he didn’t express surprise in May 2009 when a Euribor submitter told him that the compliance department might frown upon a request for information on the rate and possible tweaks.
“This is the time when people started looking into this stuff and we were all trying to figure out what was permitted and what wasn’t,” he said. “The regulation was being introduced and the way business was done was changing.”
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