Was available last year, the result might have been very different. How are you feeling . Delighted. Last week, two former Barclays Traders, ryan reich and stella yost, walked free from court, cleared of Conspiracy To Defraud by reading Interest Rates. It was the end of a long battle to clear their names reading. Im very happy. This has been fired and a half years of my life and i just want to go been fired and a half years of my life and ijust want to go back been fired and a half years of my life and i just want to go back to my family. Thats it. Thank you very much. Sometimes i look at it and i think im ina sometimes i look at it and i think im in a bad movie. Itsjust something completely. If you had told me this ten years ago i would have said youre mad. It has destroyed big parts of my life, my career, totally gone. Im sad people are injailwhen career, totally gone. Im sad people are injail when they career, totally gone. Im sad people are in jail when they shouldnt be. Thats my opinion. The acquittals raised serious questions about the convictions of four other barclays is to he was accused of conspiring with. They were convicted and jailed lastjune. Four with. They were convicted and jailed last june. Four ex employees of ba rclays have last june. Four ex employees of barclays have been sentenced to jail for rigging libel, the benchmark at which it costs thanks to borrow from each other. Ive been investigating this story for the last 18 months. Each other. Ive been investigating this story for the last 18 monthslj cant this story for the last 18 months. cant believe it. 1 merchant, who is 45, cant believe it. 1 merchant, who is a5, he was sentenced to 6. 5 years. Peterjohnson, 61, was sentenced to four years. Jonathan, do you have anything to say. Jonathan matthew, 35, was sentenced to four years. How are you feeling about it . Angry. And alex pei bond, an american who worked for barclays. He was sentenced to nearly four years. Just two hours before he was jailed, he and this wife julie two hours before he was jailed, he and this wifejulie agreed to speak to me. I never thought that what we we re to me. I never thought that what we were doing was wrong. Weve been saying the same story for ten years. He didnt do anything wrong. We dont know whats going to happen from here, you know. Itsjust very scary and i feel like it could happen to anyone to be honest, you know . Alex pabon and the other barclays as we re alex pabon and the other barclays as were all prosecuted over rigging and Interest Rate call libel. The london interbank offered rate is meant to track the cost of Borrowing Muggy called live or. It has a bigger club wins on your mortgage and other loa ns. Wins on your mortgage and other loans. Its now more tightly policed but until recently it used to be set by taking an average each day of what the big banks thought they would have to pay to borrow money. The libors are Interest Rates, they are the major benchmark for global Interest Rates, £350 trillion or so of products. Its the major benchmark for Interest Rates. The very same banks involved in setting libor had Big Money Staked On Whether libor went up or down. If a trader could influence the rates, the bank could make money. Its been called Trader Manipulation. The convicted ba rclays called Trader Manipulation. The convicted Barclays Traders say what they were doing was encouraged by their bosses, a normal commercial practice dating back to the nineties. In the city, it was Common Knowledge for new years that traders would try to secure tiny shifts in libor rates everyday four years. Pipa mangrum libor rates everyday four years. Pip a mangrum is a leading us financial expert and was an economic adviser to president bush. Pip a. When you work on a Trading Floor, your whole job is to when you work on a Trading Floor, your wholejob is to buy when you work on a Trading Floor, your whole job is to buy something for one price and you sell it for something a little higher, so this is the way every trader on our Trading Floor thinks. So when theyre asked to establish a break, theyre asked to establish a break, theyre thinking of the two sides, so theyre thinking of the two sides, so this is their attempt to create a little space because you always want to make money on the deal. The way i saw it, it was perfectly 0k to do it, its what we call a free option, you can do it, its perfectly normal, and if it works, great, if not, thats it. In august, 2007, the world changed. Globalfinancial in august, 2007, the world changed. Global Financial Markets went into meltdown. British banking was on the brink. Tonight at 10pm Northern Rail appears for calm and urges customers not to panic northern rock. Appears for calm and urges customers not to panic northern rock. Banks became scared of lending to each other, worried they wouldnt get their money back. The markets seized up. The economy was heading towards a crisis. Not since the beginning of the First World War has our Banking System been so close to collapse. Whenever you have a major financial crisis, you always have what might be called the Recrimination Phase of the economic cycle, which is when everyone goes, wait a minute, how the heck did this happen and who is responsible for it . The public and politicians on both sides of the atla ntic wa nted to politicians on both sides of the atlantic wanted to know what had gone on and who was to blame. Banks had to be called to account. Financial regulators targeted the so called Trader Manipulation of libor. Tom hayes was the very first trader to be jailed for it, found guilty of Conspiracy To Defraud. He was working for the swiss bank ubs. Tom hayesis working for the swiss bank ubs. Tom hayes is now in prison. working for the swiss bank ubs. Tom hayes is now in prison. I feel angry about it. Why . Because daddy shouldnt be in his new place, shouldnt be in his new place, should he . We call it daddys new place. That new place is loud and Grange Prison In Nottinghamshire We Re grange prison in nottinghamshire were tom hayes is serving 11 years lowden. Were tom hayes is serving 11 years lowden. The sentence isjust inexplicable. What does it compare with, what are you talking about . think you can get less time for killing someone. Sarah, a lawyer, is fighting to get her husband released. All i fighting to get her husband released. Alli really fighting to get her husband released. All i really want is for the truth to come out because if the truth came out i think he would come out of prison but the truth has never come out about this. Tom hayes had a reputation as a trading superstar. He earned millions. From his base in tokyo he had a network of london brokers who he tried to use to make small changes to libor. 0ne he tried to use to make small changes to libor. One of them was null. He was the biggest trader at the time. He had power over the brokers but other traders were squared of him as well. He would a Lwa Ys Squared of him as well. He would always ta ke squared of him as well. He would always take advantage of that scared. Tom hayes started asking too start influencing libor. Noel. The request tom hayes was making was tiny. But because his bank had billions staked on libor, even a miniscule move could make big money. Everyone knew that there was this varies important benchmark that the banks were in charge of setting and lots of traders were making their living is based on playing with it, no one made any effort to stop it or impose order on it. Tom hayes said he had tried to influence libor, like the Barclays Traders who later followed him into the dock. But they all said it was a day to day banking practice, something their bosses expected them to do. Tom hayes said he should never have been prosecuted by the Serious Fraud office, or sf oh. Theres email, theres fine recordings, chat transcripts that show people up and down the organisational ladder is new about, condoned and in some cases participated in what was going on here ladders. Participated in what was going on here ladders. He never made a secret of it, he was acting like he thought it was ok. Nole crying. They told the court they hadnt done what he had asked them to do. They we re what he had asked them to do. They were all acquitted. Weve been scapegoated in the whole thing. Theyve gone to the bottom of the food chain, six brokers answering the libor question. If theres things to be answered, we shouldnt be answering the questions. Should they have wasted that much time and money on this . I dont think so. Ubs, tom hayess employer, was fined 1. 5 billion for allowing his traders to rig libor. Ubs told us but ubs wasnt the only bank punished for manipulating libor. Ba rclays was punished for manipulating libor. Barclays was fined £290 million. A week later, its boss, bob diamond, was forced to resign. The banks chief executive bob diamond has surprised the city by quitting with immediate effect. When mps demanded to know what had been going on, bob diamond told them a handful of traders down the ranks deserved to be punished. A Criminal Prosecution Ofa be punished. A criminal prosecution of a banker. He was asked if any of a banker. He was asked if any of those bankers should be locked up. Its reprehensible behaviour and if youre asking me should those actions have been dealt with, absolutely. Thank you very much indeed. But throwing the book at a handful of bankers is not where this story ends. Hundreds of miles from the city in cumbria, Afamily Hundreds Of Miles from the city in cumbria, a family of caravan park owners were about to discover evidence of what looked like a cover up at the top of the Banking Establishment. In 2005, paul holgate and his father, martin, wanted to borrow £3. 5 million to expand their business. We were recommended to move to ba rclays. Business. We were recommended to move to barclays. It was absolutely fine, there were very good long term prospects. Barclays lent the money on condition the holgates bought a Financial Products to protect them against rising Interest Rates. What ba rclays against rising Interest Rates. What barclays didnt tell them was that if Interest Rates went down, they end up losing money. Lots of money. Thats where the problems arose. Because the liabilities that they put on us were incredible. Interest rates plummeted. And in 2012, the business went under. Interest Rates plummeted. And in 2012, the business went under. I was thrown off the park at day when the administrators were sprung upon us. I had some clothes in an overnight bag and for the next 1a months i had to make do with the clothes in that bag because the administrators wouldnt even let me obtain my own clothes. After Barclays Boss bob diamond resigned over libor, the holgates began investigating. If they could prove senior people Inside Barclays new about Libor Rigging, they might get compensation. During their legal case against the bank, they discovered thousands of confidential documents from Inside Barclays. The documents revealed that senior managers within the bank had instructed staff to rig libor. This wasnt about the tiny shifts of libor made by the traders, this was massive rigging, ordered from the top of the bank. As the bank started running out of cash during the financial crisis, most of them started doing something called nobling. Deliberately submitting artificial low libor rates so they would look in better shape than they actually were. If i asked to borrow £1000 from you and you heard my finances were in a mess, you might wa nt to finances were in a mess, you might want to charge me more in interest to cover the risk that you dont get your money back. But if i admitted i was paying higher Interest Rates, people might think i was in trouble, so people might think i was in trouble, soi people might think i was in trouble, so i might lie lie and pretend i was paying no more than anyone else. Thats what many banks did in the financial crisis. The Bank Of England had warning signs of this certainly in 2007. Its not like little whispers they were here, theres unequivocal signs theres something very wrong with this rigging. In october, 2008, the government launched Emergency Measures to get stricken banks lending again. Its been a tumultuous day. It started with the announcement of a giant Rescue Package for the british banking sector. The government pumped £37 billion of capital into the troubled banks. It was part of a huge rescue plan. If it worked, libor would fall, but it stayed frozen. The problem for the Bank Of England was even with a huge bailout, the banks knew they were all in trouble. It still wasnt getting any cheaper for them to borrow money from each other and ba rclays kept borrow money from each other and barclays kept their libor rate high to reflect that. The Bank Of England wasnt happy. 0n the 29th of 0ctober, wasnt happy. 0n the 29th of october, 2008, it Dale Mccallum paul tucker phoned up the Barclays Boss paul diamond. A conversation was had, that conversation was interpreted by senior people in ba rclays to interpreted by senior people in barclays to change their libors. This led to a flurry of e mails between people at barclays. Bob diamond has said he was misinterpreted. Instruction to lower libors was passed out in the bank. One of those submitters was this man. He pleaded guilty to manipulating libor, and is now serving four years in prison. During the holgate investigation, they found the transcript of a phone call between peterjohnson and his boss, mark dearlove. It also happened on the 29th of october, 2008. I got hold of the actual recording, crucial evidence that barclays was setting false libor rates on instruction from above. It has never been broadcast before. Mark dearlove didnt respond to our questions. Chris philp is part of the house of commons treasury select committee, we played him the recording. What do you think . If what dearlove is saying is true, that is shocking. This tape suggests that, in fact, the Bank Of England knew and indeed were encouraging or even instructing it. So we need an immediate enquiry to find out exactly what is going on in given we have just heard on this tape. The Banking System was on life support. And the Bank Of England wanted libor down. If it dropped, it would look like things were on the mend. Banks were so unwilling to lend to each other. But when mervyn king, the then governor of the Bank Of England, was called to answer questions before parliament in 2012, he said there was no instruction to doctor the libor rate. This is like, with a doctor, if the patient is sick, you want to bring the temperature down. But there is a world of difference between thinking about what measures he could adopt to bring the temperature of a patient down and actually tampering with a thermometer. But tampering with that thermometer, libor, is exactly what the Bank Of England had ordered. We were not aware. Mervyn kings Second In Command at the Bank Of England was paul tucker. Despite making that call to Barclays Boss paul dymond back in 2008, he told mps hed onlyjust found out about lowballing. Do yo recollect when libor was first raised as an issue to lowballing . Umm, the. I mean, i wasnt aware of allegations of lowballing until the last few weeks. Ditto, bob diamond. For the third time, what month did you discover about what was going on . Just give me a date. This month. It sounds to me like those people giving evidence, particularly paul dymond and paul tucker, were misleading parliament. That is a contempt of parliament, it is a serious matter. And i think we need to summon them back before parliament to explain why it is they appear to have misled mps. It is extremely serious. Paul tucker said he never misled parliament stands by everything he said previously. Mervyn king says his evidence was clear and he stands by it and that there is a world of difference between dysfunctional markets and criminal behaviour. Paul tucker didnt respond to our questions. But panorama has discovered evidence that the Bank Of England was involved in Libor Rigging even earlier. We found a confidential Us Department ofjustice document that shows paul tucker began pressuring barclays to lower its libor rates from the first of september, 2007. So, youve now got two pieces of evidence, one from 2008, september, 2007, a year before, clear evidence that the Bank Of England was pressuring barclays to lower libor. It shows it is part of a more systematic and ongoing attempt by the Bank Of England to put pressure on barclays. But the trials of the barclays bankers did not get to hear this, and much of the other evidence of lowballing, because of the Serious Fraud office saying there libor conspiracy had come to an end on the first of september 2007. That is the thing, you know, in these trials that they went through, they separated requests and lowballing. So anything to do with this, it did not go in. So you are asking me, do i think if all of this was in, would it make a difference umm, probably yes. 0k. Alex was one of the barclays bankers jailed last summer. He was released from prison three weeks ago and immediately deported to his home in texas. He still thinks he didnt get a free trial. What effect do you think it had on the case they did not bring in what we know about the bosses of the Bank Of England . The failure to not put in the jury specific evidence hamstrung the defence and how we could respond to what the prosecution was saying what is the scale of difference between what you might achieve with libor requests and what your bosses in the Bank Of England might achieve . We were were asking for an eigth of a basis point and they were asking for 50 basis points. So, about 400 times more. The Bank Of England says libor was not recollected in the uk or elsewhere during the period in question. But it has been assisting the criminal investigations into libor manipulation by employees of commercial banks. The Serious Fraud office says its still investigating lowballing. Is says it follows the evidence and aims to judge the most senior people where there is a realistic prospect of conviction. The prosecution period, which ended on the first of september 2007, was led by the evidence, and material dated after this point was provided to the defence. The 2008 recording was not permitted in the court. Barclays, they just threw us to the wolves. They were happy, i think, because they get off with their fine, and then they get some low level guys that go to jail, and theyjust continue to work and make your millions of dollars a year while we sit there and rot in jail. But there is one more twist in the libor tale. Back in cumbria, these sleuths came across a huge piece of evidence at the height of the financial crisis, barclays sensed an opportunity. Having been instructed by the Bank Of England to lower libor rates, it hatched a top secret plan with the Ricardo Master Fund. The idea was to make money with the bank. They were invested in Financial Instruments based on the moving of Interest Rates. Barclays put 100 million of its own money into the secret fund. If you look at this, this is what we have been shown. It is a transcript of a Telephone Conversation at barclays. More evidence that the Bank Of Englands paul tucker, had told them to get libor rates down. englands paul tucker, had told them to get libor rates down. I have been told to do it. It is from very, very high. Because barclays knew that Interest Rates would fall, the Ricardo Master Fund made 100 million for the bank injust Ricardo Master Fund made 100 million for the bank in just a few months. Who was in charge of the company that ran the fund . Bob diamond, the man who said he knew nothing about lowballing until 2012. When did you find out about lowballing . Today. It was being destroyed by falling Interest Rates, but barclays was making a killing. Ba rclays but barclays was making a killing. Barclays did not answer our questions about the Ricardo Master Fund, but told us it remains committed to fundamental change in its culture and operations. The bank reached a financial settlement with the holgate, but insisted the amount of compensation they received it kept confidential. Be. Of compensation they received it kept confidential. Be. You would not consider the reputation itself on being upstanding in this nation, allowing these things, not only to happen, but they are not sorted out. They are just ignored and swept away. That is the big issue, not just what is going on, but the way it has been dealt with afterwards. Tom hayes, the first banker to be jailed, has lost an appeal against his conviction and is now in his second year behind bars. His son, joshua, will be eight by the time his father is due to be released. Joshua, will be eight by the time his father is due to be releasedm is hard, because, you know, when we go to the field, i have to keep the ball with him because his dad is not around to do it. Tom hayes sends his wife and son Video Messages recorded from prison. Hello again, josh, hi mommy. I hope you are both 0k. From prison. Hello again, josh, hi mommy. I hope you are both ok. I love you loads, both of you. See you soon. Love you loads, both of you. See you soon. To buy. No senior banker in the uk has ever been persecuted for fixing libor. They do not want to go after the quys they do not want to go after the guys at the top. They go for the small guys and let the big guys float away. To the bank is prosecuted, there is a huge Double Standard in the libor blame game. Bankers up the it is now clear that this goes far higher than the Banking Establishment ever wanted us to know. It is now. 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