The Fix

Chapter 11 The Call

In the weeks after Obie's encounter with his former boss in London, the CFTC's Libor investigation began to take shape. True to his word, Mocek started sending through the evidence Barclays had retrieved from its internal probe, taking the view that it was better to get out on the front foot and seek a more favorable treatment. Boxes and CDs containing e-mails, voice recordings and instant-message transcripts arrived by courier in the lead-up to Christmas 2009 and were distributed to members of the team like presents. Then, in January, Mocek came into the CFTC and gave a PowerPoint presentation. It was an early incarnation of the case for the defense.

Libor, the lawyer explained, flicking between slides, had been run without due care and attention by the BBA for years. Traders couldn't be expected to know what they could and couldn't do when there were no rules. What's more, he said, since the financial crisis had started, interbank lending had ground to a halt. Now lenders relied on central banks to prop them up. How could anyone say a bank's estimates were inaccurate when there were no correct figures to compare them with? Still, he conceded, Barclays had been shocked to identify some rogue elements and would deal with them without mercy. It was a refrain that would be wheeled out by every institution caught up in the scandal.

The rogue element Mocek was referring to was a small team of highly paid derivatives traders, mostly in their twenties, based at ...