By Kirstin Ridley
LONDON (Reuters) - Britain's Serious Fraud Office (SFO) said on Friday it would charge former Deutsche Bank (DE:DBKGn) star trader Christian Bittar and nine others in a new phase of a global investigation into alleged benchmark interest rate rigging.
The 10 individuals will face the first criminal proceedings for alleged manipulation of Euribor benchmark interest rates, part of a global investigation that has already led to big financial institutions being fined billions of dollars and 22 men being charged.
The traders are all former or current employees of Deutsche Bank or Barclays (L:BARC) and the SFO said it planned to file further criminal charges in due course.
The nine men and one woman were expected to attend Westminster Magistrates' Court voluntarily on Jan. 11, 2016, where they would be formally charged.
Authorities have been working to lay more charges against those they allege fixed rates such as Libor, the London interbank offered rate, and its euro equivalent Euribor. The criminal trials that have already taken place have shed light on banker practices before, during and after the 2007-2009 financial crisis.
Designed to estimate the costs at which banks will lend to each other, benchmark rates such as Libor and Euribor are central cogs in the global financial system and a benchmark for interest rates on an estimated $450 trillion of financial contracts, from derivatives to student loans.
Those who once worked or still work for Deutsche Bank were named as Bittar, Achim Kraemer, Andreas Hauschild, Joerg Vogt, Ardalan Gharagozlou and Kai-Uwe Kappauf. Former Barclays bankers were named as Colin Bermingham, Carlo Palombo, Philippe Moryoussef and Sisse Bohart, a woman. They will be charged with conspiracy to defraud.
Bermingham, known to colleagues as "The Professor", is the only individual currently in Britain. Others are in Singapore, Germany and Denmark, among other places, the SFO said.
A lawyer for Bittar, Elizabeth Robertson of law firm K&L Gates, said: "Our only comment on behalf of Mr Bittar is that he intends to fully contest the criminal proceedings started today by the SFO."
"It emerged today that Mr. Hauschild will be charged with involvement in the manipulation of Euribor. He is not guilty of this offence and will vigorously contest these allegations at his forthcoming trial," said Andrew Katzen, a partner at law firm Hickman & Rose Solicitors.
Lawyers for the others were not immediately available for comment.
LIBOR-RIGGING
The latest arrests come after Tom Hayes, a former UBS (VX:UBSG) and Citigroup (N:C) derivatives trader, became the first man to be convicted by a jury of conspiracy to defraud by manipulating yen-denominated Libor. He was sentenced to 14 years in a British jail in August.
Two former traders from Dutch bank Rabobank have also been found guilty by a jury of Libor-rigging in the United States.
In the meantime, six interdealer brokers are currently on trial in London and a fourth trial, that of another group of former Barclays employees, has been scheduled for next January in London.
The trials are taking place three years after Barclays became the first bank to strike a deal with U.S. and British authorities, admitting its traders had tried to manipulate Libor and Euribor from 2005 through 2009, and that it had low-balled rates during the crisis. It was fined $450 million.
Since then, 10 other major financial institutions have been fined in Europe and the United States for their role in the scandal, including UBS (VX:UBSG), Lloyds (L:LLOY), JPMorgan (N:JPM), Citigroup (N:C) and ICAP (L:IAP).
Deutsche Bank, the latest to face a penalty, was fined a record $2.5 billion in April. As part of that deal, its London-based subsidiary pleaded guilty to criminal wire fraud and the parent group entered a deferred prosecution agreement to suspend criminal charges.