NZ resident fights rates rigging charges in the UK

Former British banker living in Wellington has pleaded not guilty to allegations by Britain’s Serious Fraud Office.

New Zealand resident Darrell Read is fighting charges from Britain's Serious Fraud Office that allege he was part of an international rates rigging scheme.

Read, with five co-accused, has pleaded not guilty in London's Southwark Crown Court to charges of conspiracy to defraud, the Financial Times reports.

The former British banker, according to the report, denied the charges via video link from New Zealand and is on conditional bail. Read and the other defendants' jury trial is set down for 12 weeks next September in London.

Read formerly worked for London firm ICAP brokering interest rate derivatives trades and is accused of attempting to manipulate Libor.

Libor - or the London interbank offered rate - is set every morning and is a key part of the relationship between borrowers and lenders around the world.

Read, who is believed to have moved to Wellington from the United Kingdom in June 2007, is also facing wire fraud charges laid by US prosecutors in September last year.

According to the FBI, Read was allegedly part of a conspiracy between 2006 and 2010 to manipulate the Yen Libor, the rate determining the profitability of his most important client's trades.

This client worked for UBS, which was one of the banks which took part in setting Libor.

In an attempt to influence the Yen Libor at the client's request, one of Read's co-accused - former ICAP cash broker Colin Goodman - allegedly sent an email to banks each day with his predictions on the rate.

According to the FBI, rather than containing his actual estimates as to where the Yen Libor would fix, Goodman (known as "Lord Libor") allegedly made predictions designed to benefit this trader.

The United States Department of Justice did not respond to inquiries about the next step in this case.

The UBS trader is facing his own UK Serious Fraud Office prosecution and his trial begins in May, the Financial Times reports.

Libor: what you need to know

• Libor - or London interbank offered rate - is woven into the fabric of the world's capital markets.
• The rate sets the price for banks, international financiers or anyone wanting to raise funds through the interest rate markets.
• From major international deals through to home mortgages, Libor is key to the relationship between borrowers and lenders globally.
• Financial instruments worth hundreds of trillions of dollars are tied to Libor.
• A British banking trade group sets the Libor every morning after international banks submit estimates of what it costs them to borrow.
• Libor became engulfed in scandal after the global financial crisis and allegations emerged that banks had rigged these rates.
• A string of financial institutions have since paid billions of dollars in settlements.