Libor-accused trader tells court he was 'whacked' with baseball bat for mistakes

A Barclays trader accused of rigging Libor was humiliated and "whacked" across the back of the head with a baseball bat when he made mistakes at work, a court has heard.

Jonathan Mathew started working at the bank when he was just 19, having not been to university or had any formal training.

The 35-year-old told Southwark Crown Court how senior trader Peter Johnson was a "hard taskmaster" and would berate him in the office when he got things wrong.

Giving evidence, Mathew explained that he failed the regulator's exams to become an "approved person" three times.

He said that although Johnson was quick to pull him up on his mistakes and was verbally aggressive, he was a "good teacher".

Mathew told jurors: "He had a 12-inch baseball bat on his desk and he whacked me across the back of the head.

"It wasn't particularly hard. It was designed to humiliate me."

He described another incident where Johnson, who it can now be revealed has admitted rigging Libor, forced him to stand on a chair and recite the capital cities of the world when he became aware Mathew did not know where Manila was.

The court was also shown an email that Johnson, also known as PJ, sent to Mathew, with the subject "Brick Dain".

Jurors heard this was so that the message would pass through the company's online filters.

Mathew told the court that he learned what to do with Libor from Johnson, and that as far as he knew, he was doing nothing wrong.

He added that he never received any training from Barclays.

Mathew eventually went on to look after the books for a number of currencies, including the Canadian dollar, and when Johnson was absent took over responsibility for the US dollar book, for which the senior trader had five brokers.

Bill Clegg QC, defending, asked his client: "When you were covering for him, when he was not there, who would you phone?"

Mathew replied: "Whichever broker he had in his handover."

Referring to what he understood of Libor rate requests received from brokers, he added: "PJ said we get these requests from time to time, that we should help these guys out. We should take a firm-first approach. 'As long as it doesn't do violence (to the) Libor adjuster'."

Shown a number of rates that he submitted, Mathew was asked: "At the time you submitted the rate, were you acting honestly?"

"Yes," he replied.

Mathew, Stylianos Contogoulas, 44, Jay Vijay Merchant, 45, Alex Pabon, 37, and Ryan Reich, 34, are accused of manipulating the US dollar London Interbank Offered Rate (Libor) between June 1 2005 and August 31 2007.

Mathew, from Shenfield in Essex, Contogoulas, from Greece, and Merchant, Pabon and Reich, all of whom live in America, deny one count of conspiracy to defraud.

The charge alleges that they dishonestly agreed to procure or make submissions of rates by Barclays, a panel bank, into the dollar Libor setting process which were false or misleading.

Mathew will continue giving evidence at 11am on Friday.