UK: Comment On Sentencing Remarks In The Euribor Prosecution

Last Updated: 1 October 2018
Article by Kevin Clancy

Proportionate sanctions, the need for robust compliance procedures, and the importance of mitigation.


In July 2018, Christian Bittar and Phillipe Moryoussef were sentenced to imprisonment for five years, four months and eight years respectively. Philippe Moryoussef was found guilty of manipulating Euribor, whilst Christian Bittar (who was described as the principal conspirator) pleaded guilty before the two-month trial started.

Euribor is defined as "the rate at which Euro interbank term deposits are being offered within the EMU zone by one prime bank to another at 11.00am Brussels time" . It has also been described as being "the primary benchmark for short term interest rates and one of the most globally significant numbers in finance".

The manipulation of the rate, which gave rise to the investigation and subsequent criminal trial, was said to have occurred in several ways – collusion with bank colleagues, collusion with the employees of other banks, and "cash pushing" (which is offering cash to the market with the intention of altering the Euribor rate in the lead up to a fixing or reset date).

General observations by Judge Gledhill QC

In making his sentencing remarks, His Honour Judge Gledhill QC made a number of observations about the context within which the rate manipulation could occur, as well as the specific manipulation offences itself. Phillipe Moryoussef did not attend the trial, with adverse comments being made about his attitude towards the English judicial process.

The judge made reference to the casual, if not foolhardy, approach to the submission of rates by banks. Speaking about how the offences could be committed at all, the judge commented:

"Neither the definition of Euribor nor the Code gave any instruction, guidance or assistance as to how the panel banks' submitter should determine the rates they submit. That failure might be thought by an interested observer to be at best foolhardy, if not utterly negligent. It was an open door for those involved in the conspiracy to manipulate, or attempt to manipulate, the Euribor rate for the advantage of their own banks' trading positions.

This case has shown all too clearly that both the banks and some of the employees fell far below these standards".

The sentencing remarks also made a relevant observation about the frailty of being human, in a banking culture where gaining the smallest of advantages could have consequences running into billions of pounds / euros:

"Bankers may earn huge amounts of money, but they remain human beings, and sometimes the prospect of earning money either for their banks or themselves, or the risk of losing money, stifles both ethics and honesty."

Christian Bittar

That particular point came into sharpest focus when Judge Gledhill reflected on the trading reputation of Christian Bittar.

Mr Bittar was described in the sentencing remarks as being "a highly successful derivatives trader, perhaps the best in the world. One of his character witnesses, who worked with him at Deutsche Bank, described him as the 'single most talented trader he had ever met". Another said he was 'without doubt, the best short end derivatives trader in the country' ".

His remuneration reflected his reputation: he received over £3.5 million in 2005 and in 2009 this had risen to £47.8 million.

The Judge's observation sums up his earlier assessment that, despite the ability of an individual to be highly successful in the arena in which he operates, bankers remain human beings:

"It is beyond irony that he was legitimately earning huge sums and there was no obvious need to resort to dishonest manipulation."

However, it could be said that the fault is not just a lack of honesty. Rather, a problem was with compliance procedures that appeared to be so lax that dishonest traders could act with little fear of being discovered.

The importance of mitigation

When determining the correct sentence to impose, it is necessary for the Court to have regard to the aggravating and mitigating factors that arise in any particular case.

A clear theme in the sentencing remarks is that the purpose of sentencing in a case such as this is not just one of punishment, but also a clear message of deterrence to others. In the world of financial crime, this is not new: probity, honesty, and trust are essential characteristics in ensuring that the banking industry functions correctly and effectively.

The case of Mr Bittar was considered so serious that the correct starting point was a custodial sentence for 9 years. Of wider interest may be the Judge's remarks in connection with mitigation.

Regard was had to Mr Bittar's previous good character (supplemented by a number of positive character references) and that the investigation and criminal proceedings will have taken its toll on Mr Bittar, and his family. It was noted that the likelihood of further offending in the future was very low, and the Judge was prepared to take into account the lengthy delay (around 10 years) between the period of offending and the resulting trial.

As such, the sentence was reduced to 8 years.

Mr Bittar pled guilty at the first opportunity available to him. An early guilty plea often attracts a sentencing discount from the court. That typically reflects that utilitarian value of a plea to both the court and to potential witnesses.

However, the early guilty plea in this case had a further advantage to the prosecutor: that by pleading guilty at an early stage, the prosecutor was able to prove, in relation to the other defendants, that there was in fact a conspiracy to defraud. That was a significant development.

The consequence was that not only was the prosecution of Mr Bittar more efficiently concluded, but that the issues to be resolved in other proceedings were reduced substantially.

The net effect of all of these mitigating factors was that the sentence was reduced to 5 years and 4 months.

Phillipe Moryoussef

No such mitigatory factors could be relied up by Phillipe Moryoussef. The evidence in relation to Mr Moryoussef was particularly damming, with reference being made to a document dated 9 March 2007 in which he said: "They are flooding the market. They are already massively long in futures ... All in all, they earned some dough".

The sentencing remarks observed that two conclusions could be drawn: "firstly, that [Phillipe's] motivation was greed. But perhaps, more importantly, he was confessing to his profitable role in manipulating the Euribor rate."

The matter against Mr Moryoussef was heard in his absence after he had fled to France. A French advocate was instructed to engage with the court process. This did not escape criticism. It seems the impertinent tone of the letter from the French advocate did not find favour with the Court. The sentencing remarks note that the letter "demonstrates the ignorance of the advocate of English law" and that, had it been written by an English advocate, it "would be dealt with by a contempt proceedings".


This case highlights not just the importance of robust compliance procedures, but also how co-operation with the authorities can result in significantly reduced sentences. And, be polite to the judge!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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