The Libor-rigging scandal was buried more than four years ago. For a Zurich-based former trader at the bank, the saga is far from over. finews.com speaks to his lawyer.
Libor is just a faint memory for Zurich-based UBS: the bank paid $1.5 billion to U.S. regulators for manipulating the benchmark interest rate, while Swiss regulator Finma clawed back 134 million Swiss francs in unlawfully gained profits – the highest financial penalty ever levied in Switzerland.
If the issue is over for the institutions like UBS and Barclays, it has continued to dominate the lives of a handful of traders around former UBS trader Tom Hayes who were also criminally charged.
One is Switzerland's Roger Darin, who was charged with one count of wire fraud conspiracy in 2012 over allegedly rigging the Libor rate. Since then, Darin has quietly sought to have the case dismissed, as well as to restore his reputation and make a living.
«Tender Mercies»
There have been setbacks on all counts. Darin, a former managing director at UBS who worked in Tokyo, Singapore and Zurich for the Swiss bank, is now effectively stuck in tiny, landlocked Switzerland. If he crosses into neighboring countries, he faces the threat of arrest and extradition to face the U.S. charges.
The case of Raoul Weil, UBS’ former private banking head who was arrested at a Bologna hotel and incarcerated in a cramped Italian jail before being extradited to the U.S. to face charges, is a painful precedent.
Weil was eventually acquitted, though he now has to cope with a French investigation. Should Darin voluntarily faces the U.S. charges? His lawyer isn’t taking any chances.
«I wouldn't recommend facing charges, it’s too uncertain. Even if you’re quite sure that you are right, you are submitting yourself to the tender mercies of the U.S. government and a jury: yes, you should win, but you might lose and potentially end up worse off than in Switzerland, by far,» Bruce Baird of Covington & Burling told finews.com.
Fintech Job
Career-wise, Darin has fared better since 2015, when Baird described him as in a «Kafkaesque» limbo personally and professionally. Efforts to set up his own firm, FX Diversity, foundered because he couldn't set up as a regulated asset manager.
Darin has since left that firm, which he co-founded, and works as a product manager for a Zurich area fintech firm. He is also involved in Switzerland’s Bitcoin association as well as a non-profit which links investors to tech startups.
«Years have passed since the indictment, and more may pass. In the meantime, he has to live his life,» Baird told finews.com.
Swiss Watch List
To be sure, his return has not been without difficulty: an unnamed former UBS banker – it is unclear whether it is Darin – fought to have his name wiped from a regulatory log of Swiss bankers who don’t meet fitness and proprietary standards. The banker took the case to Switzerland’s highest court – and won.
That is a good sign for Darin, who has never been charged with anything in Switzerland.
Meanwhile, the former UBS banker is trying to clear his name in the U.S., which would allow him to travel freely: «It would be nice to get this matter behind us, and we have not given up on possibilities to do that,» says his lawyer.
Barclays Traders Cleared
Recent developments lend hope to this: two former Barclays traders were cleared this week in the U.K., where officials have been less than successful in convicting traders over Libor. The traders, Ryan Reich and Stylianos Contogoulas, admitting asking for Libor rates to help their books, but said their bosses had directed them to do so.
Their acquittal highlights that no senior executives have ever been taken to task over the Libor crimes, though Barclays Chief Executive Bob Diamond stepped down after the scandal emerged. Carsten Kengeter, then head of UBS' investment bank, stayed on for another year, as did CEO Sergio Ermotti, then just a year into his tenure at the helm of UBS.
«Like the recently acquitted Barclays traders, Roger Darin was doing what his supervisors told him to do and had no idea that what he was doing could be considered a criminal offense,» lawyer Baird said.
«We are hopeful that the Barclays verdict will be the first step toward a better understanding of the real facts in these cases by the courts.»
Hayes' Appeals
The case of Hayes, an autistic British man who worked with Darin at UBS and is his co-defendant in the U.S., is the most complicated. He was sent to prison for 14 years, a sentence which was later reduced to 11 years. Hayes won't be re-tried in the U.S. because he has already faced charges in the U.K.
Hayes' efforts to clear his name through appeals in the U.K. may throw up new facts which could benefit Darin in the U.S.
In parallel, attempts by former Rabobank traders Anthony Allen and Anthony Conti to reverse their convictions could provide new leads for Darin. Allen and Conti are arguing that testimony from a former colleague-turned-informant may have been tainted.
