LONDON — In a major setback for British prosecutors, a jury on Wednesday acquitted five former brokers on charges that they helped a onetime trader at UBS and Citigroup manipulate an important benchmark interest rate known as Libor.
The jury is continuing to deliberate one remaining count of conspiracy to defraud against Darrell P. Read, a former broker at the British financial firm ICAP, after it was unable to reach a verdict on that count. The jury went home for the day Wednesday and will return Thursday.
The jury found Read not guilty on a separate conspiracy count Wednesday, a day after beginning its deliberations.
The verdict is a blow to British authorities, who have been criticized for not being as aggressive as the US Department of Justice in pursuing financial crime.
The trial, which began in October and is the second in Britain to focus on the Libor scandal, came after a half-decade investigation that has led to billions of dollars in fines, cost one chief executive his job, and rocked the reputations of some of the world’s biggest banks, including Barclays, the Royal Bank of Scotland, UBS, and Deutsche Bank.
The former brokers worked at the British financial firms ICAP, RP Martin, and Tullett Prebon Group and were accused of conspiring to manipulate the London interbank offered rate, or Libor.
The brokers acquitted Wednesday are Danny M. Wilkinson and Colin J. Goodman, formerly of ICAP; Terry J. Farr and James A. Gilmour, formerly of RP Martin; and Noel Cryan, formerly of Tullett Prebon.
Prosecutors had accused the men of assisting Tom Hayes, a former trader at UBS and Citigroup, and others to profit by rigging Libor, which helps determine the borrowing costs for trillions of dollars in loans.
At a separate trial, Hayes was convicted in August of conspiracy to defraud. In December, a British appeals court reduced his sentence to 11 years in prison, from 14 years.
Hayes was the first person to go to trial in Britain on criminal charges related to Libor manipulation, and his case was seen as a bellwether for efforts by British authorities to pursue financial crime.
“The key issue in this trial was whether these defendants were party to a dishonest agreement with Tom Hayes. By their verdicts, the jury have said that they could not be sure that this was the case,’’ David Green, director of the Serious Fraud Office, which brought the criminal case, said in a statement. “Nobody could sensibly suggest that these charges should not have been brought and considered by a jury.’’
A third trial of other individuals accused of manipulating Libor is expected to begin as early as next month.
Lawyers for the former brokers argued the men were being made scapegoats for a flawed system and had lied to Hayes about their ability to influence the rate.
The fraud office accused the brokers — several of whom had colorful nicknames — of assisting Hayes and others to try to manipulate submissions of Libor as it related to the Japanese yen by so-called panel banks — financial institutions that are surveyed each day and whose information is used to calculate Libor.
To set Libor and other rates, banks submit the rates at which they would be prepared to lend money to one another, on an unsecured basis, in various currencies and at varying maturities.
For example, prosecutors said that Goodman would make predictions each morning on where Libor would be fixed later that day, earning him the nickname Lord Libor.
Prosecutors argued that Goodman had been aware of Hayes’ “wishes’’ on Libor and skewed his daily predictions about where Libor related to the yen would be fixed in order to manipulate the interest rate.
Read, who had the nickname Big Nose, was Hayes’s main contact at ICAP and served as a link to Goodman and Wilkinson, prosecutors said. Wilkinson, who had the nickname Sarge, was head of the desk where Read worked.
The trial revolved around a series of e-mails and instant messages and other documents related to the complicated process of setting Libor.
