Britain charges 2 brokers over Libor rate scandal

Britain\'s Serious Fraud Office said Monday that two former brokers have been charged with conspiring to manipulate the Libor interbank lending rate. \"Terry Farr and James Gilmour, former brokers at RP Martin Holdings Limited, have today been charged with offences of conspiracy to defraud in connection with the investigation by the Serious Fraud Office into the manipulation of Libor,\" the SFO said in a statement. The men will appear in court at a later date, it said, adding that its probe into Libor manipulation would continue. Gilmour, 48, was charged with one count of conspiracy to defraud. Farr, 41, was charged with two counts of the same offence. The development comes after the SFO filed similar charges against former UBS and Citigroup trader Tom Hayes last month. All three men were arrested in Britain last December as part of the investigation. Libor is calculated daily, using estimates from banks of their own interbank rates. However, the system has been found to be open to abuse, with some traders lying about borrowing costs to boost trading positions or make their bank seem more secure. The Libor scandal erupted last year when British bank Barclays was fined £290 million ($470 million, 363 million euros) by British and US regulators for attempted manipulation of Libor and Euribor interbank rates between 2005 and 2009. Royal Bank of Scotland and Swiss lender UBS have also received heavy fines over alleged rigging of Libor. Euribor is the eurozone equivalent. Libor or the London Interbank Offered Rate is the umbrella term for benchmark rates that underpin the terms of 500 trillion US dollars (£320 trillion) of contracts from mortgages to the cost of corporate lending. Last week meanwhile, Britain announced that NYSE Euronext, the owner of the New York Stock Exchange, would take over management of Libor early next year. That followed a review which recommended that industry body the British Bankers\' Association (BBA) should be stripped of its responsibility for setting Libor after widespread rate-rigging was found to have taken place.