By Kirstin Ridley
LONDON (Reuters) - A former manager at ICAP (LONDON:IAP), the world's largest interdealer brokerage, and a former trader at U.S. bank JPMorgan (NYSE:JPM), plotted to corrupt a new recruit as part of an alleged scam to rig global interest rates, a prosecutor told London's second Libor trial on Thursday. In a recorded telephone conversation dated Aug. 20, 2007 and played to Southwark Crown Court, the former JPMorgan trader Stuart Wiley told the former ICAP manager Danny Wilkinson that the bank had replaced an employee responsible for Libor rates, whom he described as "so by-the-book".
Referring to convicted former UBS trader Tom Hayes as "Choc Ice", Wiley then said, "Can you mention to Choc Ice that we've got ... a new geezer doing our (Libors). New bloke, with a new packed lunch and new bus pass."
Wilkinson, a former desk head at ICAP who is on trial with five other brokers in London on conspiracy to defraud charges, responded, "Do you, do you wander over, give him the odd Mars bar and say, you know, 'end of the year we'll ... sort you out'?"
Wiley has not been charged with any wrongdoing.
A spokeswoman for JPMorgan in London declined to comment on the case.
In an exchange which prosecutor Mukul Chawla alleged showed how individuals agreed to bring new recruits into a conspiracy to rig Libor rates, Wiley responded that he was, "obviously going to try to do something like that".
Wilkinson, Darrell Read, Colin Goodman, Terry Farr, James Gilmour and Noel Cryan are charged with being part of conspiracies to rig Libor, the London interbank offered rate, a benchmark used for pricing $450 trillion of financial contracts, from derivatives to student loans.
They have pleaded not guilty and are expected to start laying out their defence in mid-November in a trial scheduled to last 12-14 weeks.
Former UBS and Citigroup (NYSE:C) yen derivatives trader Hayes was convicted of conspiracy to defraud charges related to Libor manipulation on Aug. 3. He was sentenced to 14 years in jail and is appealing against the conviction and sentence.
Tokyo-based Hayes was such a key client to the brokers, because of the business he provided, ICAP managers discussed paying for his ticket to Las Vegas to watch a Ricky Hatton boxing match, the court was told on Thursday.
David Casterton emailed colleague Richard Petersen on Oct. 31, 2007, saying it was not standard practice to fund such expenses.
But he added in the email, which was shown to the court on screens and read out, "But Tom is an unusual case." Petersen responded, "I am happy to pick up our half of the ticket for Tom. He is certainly a player in the market, isn't he?"
Neither Petersen, a managing director at ICAP in New Zealand, nor Casterton, now CEO of global broking at ICAP in London, have been accused of any wrongdoing.
A spokeswoman for ICAP in London declined to comment on their behalf.
(Removes court's reference in paragraph 11 to Casterton's location in New Zealand in 2007)