By Kirstin Ridley
LONDON (Reuters) - A former ICAP (L:IAP) broker charged with conspiracy to manipulate benchmark yen interest rates told a London criminal court on Wednesday that 1,000 rate predictions he had sent out over four years had only ever reflected his honest opinion.
Colin Goodman, 53, said he spent 20 percent of his time as a middleman to banks trading yen and compiled a daily email before 7 am in London for his bank clients in which he predicted where he saw yen Libor rates set at around 11 am London time. This helped him earn the nickname "Lord Libor", he said.
The prosecution alleges Goodman, one of six former ICAP, RP Martin and Tullett Prebon (L:TLPR) brokers charged with helping convicted derivatives trader Tom Hayes rig Libor, "skewed" his predictions to favour Hayes's trading position in the hope banks that help set Libor rates would follow his lead "like sheep".
Libor, the London interbank offered rate, is a benchmark for interest rates on around $450 trillion of financial products and consumer loans worldwide.
But Goodman said he never expected banks, that sent their estimated costs of borrowing funds in various currencies to an administrator every day from which Libor was calculated, to match his predictions. He said he found requests from others to move his predictions either up or down "annoying".
"(My Libor predictions) were my best, genuine estimate at the time," Goodman, who stepped into the witness box to testify on Wednesday in London's second Libor trial, told Southwark Crown Court.
Hayes, a former UBS (VX:UBSG) and Citigroup (N:C) yen derivatives trader, was convicted in August of conspiracy to manipulate Libor and was sentenced to 14 years in jail. He is appealing against the conviction and sentence.
Goodman, who joined the aggressive world of broking two years after leaving school at 18 and had worked his way up in the business, said he felt "aggrieved" that he was persistently asked for his opinion of the market, which allowed others to profit and took him away from his main day job of trading euros, without any reward.
In September 2007, he was given a 5,000 pound-per-quarter share of a fee UBS paid ICAP for "Libor information", Goodman said. This helped nudge his total annual remuneration to 154,690 pounds in 2007, peaking at 267,190 pounds in 2008 before dropping back to 120,090 pounds in 2010, the jury was told.
His former New Zealand-based colleague Darrell Read, the first of the six to testify for the defence over the last few days, has told the court he sent scores of emails, computer messages and text messages to Goodman that passed on Hayes's requests for higher or lower rates.
But Read denied that he sought to influence Goodman or that his communications were requests or demands.
Goodman said he did consider Read's communications to be requests to change his rate predictions. But he said he ignored them.