Barclays must reveal Libor traders, submitters in swap suit

Barclays Plc must disclose the identities of Libor traders and employees that made submissions to set interest rates, after a ruling in the first U.K. lawsuit related to manipulation of the London interbank offered rate.

Judge Julian Flaux in London said the bank must give the information on the workers to affiliates of Guardian Care Homes Ltd., which sued the bank over a loss-making interest-rate swap tied to Libor. London-based Barclays must also provide Guardian the e-mail communications of 42 employees, transcripts of phone conversations that refer to Libor, board minutes and documents from the bank’s treasury committee, Flaux ruled today.

Flaux hasn’t yet ruled on whether the bank must disclose the information only to Guardian or if it should be made public.

Guardian sued over the swap that cost it about 12 million pounds ($19 million), saying Libor -- the baseline for about $300 trillion of contracts worldwide -- can’t be trusted. In June, the lender was fined a record 290 million pounds after regulators found its investment bankers tried to manipulate the interest rate.

Guardian’s lawyers declined to comment after the hearing. Barclays spokesman Jon Laycock wasn’t immediately available.

Barclays failed to have the Libor-fixing part of the suit thrown out on Oct. 29 when a judge ruled it would have to answer accusations it profited from rigging Libor submissions.

Rate Swap

Guardian, based in Wolverhampton, England, claims the Libor-based interest-rate swap it bought from Barclays isn’t valid because the bank knew, or should have known, the rate wasn’t accurate.

Barclays was previously denied permission to have the swap claim decided by British financial regulators instead of a judge.

Regulators worldwide are investigating allegations banks altered submissions used to set Libor in an effort to benefit traders, or to appear financially healthier than they were.

Libor is calculated by a poll carried out daily on behalf of the British Bankers’ Association that asks firms to estimate

how much it would cost to borrow from each other for different periods and in different currencies. The BBA signaled in September it will give up oversight of the rate. submissions.

Dan Doctoroff, President and Chief Executive Officer of Bloomberg LP, has offered a measure dubbed the Bloomberg Interbank Offered Rate, or Blibor. It would use data from a variety of financial transactions in an effort to better reflect participating banks’ real cost of credit. Bloomberg LP is the parent of Bloomberg News.

Bloomberg News

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