There has been widespread condemnation of the manipulation of Libor settings by employees of interdealer broker Icap, and rightly so. But the time has surely come for defenders of former Icap employee Colin Goodman, aka Cash Broker A, aka Lord Libor, aka Lord Bailiff, to step forward.
It would take a heart of stone not to be moved by the plight of this humble toiler in the broking machine that is Icap. Interdealer brokers rank low in the hierarchy of the City of London to begin with, and cash brokers rank well below their colleagues on derivatives desks.
The investment bankers and hedge fund managers who see themselves as the City elite have grudging respect for senior brokers at Icap and rival firms, as they can guess the bonus levels that are generated by top performers. And this turns into outright envy of Michael Spencer, who founded Icap and built a fortune estimated at over £500 million ($800 million) from his ownership stake.
Michael Spencer, Icap's founder
Spencer controls his own destiny, which cannot be said by any banker, and has parlayed his fortune into a seat at the UK establishment table, where he mixes with prime minister David Cameron and was at one point treasurer of the Conservative Party.
Spencer seemed keen to dissociate himself from the grimier end of the business where he made his money, even before the Libor-fixing scandal embarrassed Icap. Spencer sprinkles his conversation with Latin tags as if to emphasize the gap between his social status and that of staff such as Colin Goodman, for example.
The most recent evidence presented by the US Justice Department about Icaps Libor abuses highlighted just how vast the gap was between the financial status of Spencer and Goodman.
When excerpts of emails and phone transcripts relating to Libor manipulation began to emerge, many observers assumed that references to buying curry and drinks for brokers who helped to fix rates must be code. In relations between London criminals of a traditional bent (and sometimes the police) there is a long-established custom of agreeing to buy someone a drink.
This is generally taken as a commitment to make a cash payment for an illicit service, although confusingly it might also involve drinking. Many of us thought that recorded interaction between bankers and brokers at Icap and elsewhere involved similar signals, where an agreement to buy lunch was a verbal commitment to make a payment that was appropriate for helping a banker to lock in a multi-million dollar profit on a fixed trade.
Shockingly, the latest evidence indicates that Goodmans integral role in the Libor-fixing ring at Icap really was rewarded with curries and other food- and drink-related compensation.
The transcripts of Goodmans attempts to secure actual cash make harrowing reading. In one 2008 email, Darrell Read, a yen derivatives broker at Icap, told his UBS trading contact, Tom Hayes, that Goodman was: OK with an annual champagne shipment, a few piss-ups with Danny (Wilkinson, another yen derivatives broker) and a small bonus every now and then.
This came over a year after Goodman had complained to Wilkinson that: I get the dribs and drabs. Life is tough enough over here without having to double-guess the Libors every morning and get zipper-de-do-da.
The derivatives brokers used this threat of a go-slow to get UBS to agree to pay £5,000 extra a month to their desk and in turn paid Goodman £5,000 a quarter from that increase.
The payment of £20,000 a year for Goodmans central role in a price-fixing ring that helped Tom Hayes of UBS to generate multiple millions of dollars of bonuses might seem unfair in itself.
But it is the plaintive note in Goodmans complaint about life on a cash desk at Icap that really tugs at the heartstrings. The combination of pre-dawn starts to deal with clients in Japan, minimal pay compared with swap brokers and the pressure of coordinating a price-fixing ring must have made for a stressful life.
It is clear there will be further repercussions from Icaps role in fixing Libor, beyond the £55 million fine the firm has already agreed to pay to regulators. Those of us who had cherished the idea that we would one day be able to hail Sir Michael Spencer, or even Lord Spencer of Broadgate, will probably be disappointed. But there is surely no need to apply harsh punishment to Colin Goodman, that yeoman of broking whose Lord Libor nickname was simply a cruel joke.
The man has suffered enough.