Acquittal for Hickman & Rose client Ryan Reich in landmark Libor retrial
6 Apr 2017
Yesterday Ryan Reich was unanimously acquitted of conspiracy to defraud, following a short retirement. The allegation concerned communications between Mr Reich and the Barclays LIBOR submitters between 2005 and 2007, when Mr Reich was a 24-year-old junior trader at the bank.
Mr Reich would like to make the following personal statement:
“I would like to thank the jury for the swift and unanimous verdict that has cleared my name. For the last eight years I have consistently explained that I acted appropriately, honestly, and in accordance with the rules at the time. I am relieved and delighted to have been acquitted.
I am saddened that it has taken so long to expose the case against me, a junior trader just doing my job over a decade ago, as being totally without foundation. It is based on a fundamental misunderstanding of the facts. I cannot help but note that this trial was the first time that any jury has actually been asked to consider whether as a matter of fact any trader deliberately broke the rules or caused false LIBORs to be submitted. They rapidly rejected the SFO’s case. There can be little doubt that, had the juries been properly directed in earlier trials, acquittals would similarly have resulted.
Further, I note that again and again the FCA, the official regulator, has rejected similar allegations against other traders as without factual foundation.
Finally, I would like to thank my legal team, my friends, and above all my family for their support throughout this ordeal.”
Mr Reich has always maintained that he acted appropriately and honestly. At all times Mr Reich was simply doing his job, openly and transparently, in accordance with the rules at the time.
The jury heard evidence from senior managers at Barclays, who accepted that in 2005-2007 communications with the LIBOR submitter were permitted which created conflicts of interest, and that there was insufficient clarity and training as to what was and was not allowed. The jury were shown documents demonstrating that Barclays’ senior managers, and senior officials within the BBA and the Bank of England, were made aware of commercial influence on LIBOR in 2005-7, and took no steps to prevent or address this.
In these circumstances, it is of real concern that the SFO has chosen to pursue Mr Reich and other junior traders for conduct that was widespread, tolerated and encouraged by senior figures in the industry at the time.
This trial is the first of the LIBOR trials in which a jury has been asked to consider whether the defendants agreed to deliberately break the rules. It is telling that unanimous acquittals resulted.
This has been an extremely difficult time for Mr Reich and his family. He has had to fight this case in a foreign jurisdiction over many years and at great personal cost. He thanks his family and friends who have supported him throughout these proceedings.
Note to editors
This was Mr Reich’s second trial, after a jury failed to reach a verdict in 2016.
Mr Reich was charged with conspiracy to defraud. Following the first trial, the Court of Appeal ruled for the first time that the SFO had to prove an agreement to deliberately disregard the proper basis for setting LIBOR (R v Merchant  EWCA Crim 60).
The offence of conspiracy to defraud has been described in Parliament as “repellent” (Hansard (HC Debates), 12 June 2006, col 561). In 2003, the Law Commission considered that the offence was “indefensible” and “so wide that it offers little guidance on the difference between fraudulent and lawful conduct”, and recommended its abolition.
A BBA minute records that on 18 August 2005, at a meeting between senior members of the BBA (including the Chief Executive and Deputy Chief Executive) and the Bank of England, senior Bank officials Paul Tucker (later Sir Paul Tucker, Deputy Governor), David Rule and Paul Fisher were informed by the BBA that “there was a market consensus that the GBP-USD LIBOR as some 3-4 bp over the actual market rate. This was essentially a construct of the market, as it is in the interests of banks to have a higher LIBOR.”
The value of such an overstatement was estimated during the trial by the prosecution expert witness Professor Ronald Anderson to be of the order of $500,000,000 each year to lending banks as a group.