Barclays Must Hand Over More Ex-Boss Emails In Libor Case
Barclays has been told to hand over thousands more emails and other documents from its former bosses in a UK court case tied to the alleged manipulation of Libor interest rates, which will start in April.
In a case being heard at London's High Court, Barclays is accused by a UK residential care home operator of mis-selling products that were based on Libor rates. The hearing will start on April 29 or 30 and is expected to last for about six weeks.
It is seen as a test case for whether the manipulation of Libor - which several banks around the world have admitted and been fined for - means deals such as interest rate hedges that were based on benchmark rates may have been mis-sold.
In a hearing on Friday to resolve issues before the case starts, judge Julian Flaux said Barclays must produce documents from several executives and traders related to a fund the bank ran. That includes emails and other correspondence from former Chief Executive Bob Diamond and investment bank bosses Rich Ricci and Jerry del Missier.
"I'm not going to give them the key to the door, but I certainly think more (disclosure) is in order," Flaux said.
The order could add up to 38,000 more documents to the 220,000 already produced for the case.
Diamond, Ricci and del Missier are among 23 people who are being called as witnesses for the trial. Former Finance Director Chris Lucas will also be called.
Diamond and del Missier left Barclays in 2012 shortly after Barclays agreed to pay a $450 million settlement with U.S. and UK authorities due to alleged Libor manipulation. Ricci and Lucas left last year.
Guardian Care Homes claims the bank's rigging of Libor meant interest rate hedging products it was sold were invalid and is suing for 70 million pounds ($115.5 million). Barclays, which says it is owed the same amount by Guardian, said the claims are without merit and it will provide the information requested.
Guardian Care Homes said at the heart of its case is the Ricardo Master Fund, which was run by Barclays. Guardian said Ricardo had $4 billion invested in securities and relied on low 3-month sterling Libor rates as "its most profitable single strategy".
The care homes operator said Barclays was therefore a direct beneficiary of the downward manipulation of Libor rates, while at the same time the bank was selling it an interest rate hedging product "on the basis that Barclays believed rates would go up".
Flaux told Barclays' lawyers they must provide by March 21 documents where the Ricardo fund was mentioned by Diamond and others. Documents from former Barclays trader Quan Lee, and Mark Dearlove, who is still at the bank and previously was money markets desk head, must be handed over first.
Flaux however refused Guardian's request to have more documents about the alleged manipulation of Euribor benchmark rates provided by Barclays.
"There's going to be enough to fight about in April without bringing in Euribor," he said, referring to another benchmark.