Deep Into The Lieborgate Rabbit Hole: The Swiss Hedge Fund Link?

That Lieborgate is about to spill over and take down many more banks is well known: as previously reported that the world's biggest bank Deutsche Bank, has become a rat for the Liebor prosecution having turned sides. The reason: "Under the leniency programs of the EU, companies may get total immunity from fines or a reduction of fines which the anti-trust authorities would have otherwise imposed on them if they hand over evidence on anti-competitive agreements or those involved in a concerted practice." However, just like in the case of Barclays (with Diamond), JPM (with Bruno Iksil), UBS (with Kweku) and Goldman (with Fabrice Tourre), there always is a scapegoat. Today we find just who that scapegoat is. From Bloomberg: "Regulators are investigating the possible roles of Michael Zrihen at Credit Agricole, Didier Sander at HSBC and Christian Bittar at Deutsche Bank, the person said on condition of anonymity because the investigation is ongoing. The names of the banks and traders were reported earlier today by the Financial Times."

Of course, as so very often happens, the link between the investigated firm, and the person in question no longer exists - after all what better brute way to tie up loose ends, than to fire the person in question at some point in the past: "Michael Golden, a spokesman for Deutsche Bank, confirmed that Bittar left the bank last year and declined to comment on the investigation." Not surprising. Yet this is where the story gets interesting, and provides a whole new twist on the Lieborgate scandal.

Notice that up until now, the only firms that have been implicated in Lieborgate are, by definition, the BBA member banks which provided daily USD Libor fixings. However, nowhere is it said that this information never exited this close knit cabal of 16 manipulating banks. After all, there are $2 trillion in AUM (a number that is likely $5 trillion when accounting for all the rehypothecated assets at the Prime Brokers) out there run by unregulated hedge funds, and all of these entities would certainly find a way to make a pretty buck on even the tiniest 'manipulated', and leveraged Libor arbitrage. And would also pay a pretty penny to get that info. Which brings us back to Bittar. And LinkedIn.

Since neither Bloomberg, nor the earlier FT article have any discussion of just where Mr. Bittar ended up, knowing quite well there is very likely a full-scale investigation forming into his Libor transgressions. The first place we went to, naturally, was LinkedIn, not because we expected to find his profile there: very few higher echelon bankers actually post their resumes on LinkedIn, but because we were fairly confident that the very useful function of seeing whose other profiles had been looked at in the context of even a "fake" Bittar, would provide us with clues. Sure enough that's precisely what happened.

Sure enough, the first entry for the DB trader is the following:

Christian Bittar




    Greater New York City Area

Hardly the person we are looking for. Yet what we were looking for is right here: the follow up profiles of people that are contextually relevant, and correct. And again the context, at least superficially, is anyone connected to a person who allegedly has been involved in Libor manipulation.

We get some curious names:

Going down the list, it just gets curiouser and curiouser as we go deeper and deeper into the rabbit hole.

The first person:

  • philippe moryousse, Managing Director at Morgan Stanley

a cursory search reveals the following on philippe: From February

Barclays reported a suspected manipulation of the Euribor by one of its employees, Philippe Moryoussef, who left the bank in 2007 and is currently employed with Nomura Singapore.


Addressing the allegations, a Nomura spokesman said: “Nomura is aware of the investigation into the setting of Euribor and Libor rates. The allegations against Mr Moryoussef are related to a period of time before he joined Nomura. We would point out the fact that Nomura is not a member of either the Euribor panel or the Libor panel, and therefore has no role in the setting of these rates.”

And yet, as of literally 9 hours ago:

Philippe Moryoussef, a Singapore- based derivatives trader at Nomura Holdings Inc., (8604) Japan’s biggest brokerage, left the bank as investigators probe his involvement in the suspected manipulation of interest rates, according to two people with knowledge of the move.


Moryoussef’s departure last month was by mutual agreement and relates to his work at his past employer, Barclays Plc (BARC), rather than Nomura, said one of the people, who asked not to be identified because the departure hasn’t been made public. Moryoussef didn’t return messages sent via LinkedIn and wasn’t contactable through directory searches in Singapore and London.


Moryoussef joined Nomura in February 2011 after a yearlong stint at Morgan Stanley, according to the U.K. Financial Services Authority’s register. He worked at Edinburgh-based Royal Bank of Scotland Group Plc (RBS) from August 2007 to June 2009 and at London-based Barclays from May 2005 to August 2007.


FSA spokesman Chris Hamilton declined to comment on whether Moryoussef is under investigation as part of its probe. Officials at Barclays declined to comment on Moryoussef.

So immediately we get one indirect connection, at least based on others' curiosity, into a person who has just left once more after his past transgressions at Barclays back in 2007 have become evident. Something tells us Philippe is one of the anonymous gentlemen whose Champagne-reference laden emails have made the case against Barclays legendary. Oh and his previous stint at RBS is likely about to be exposed too.

But like we said this is not about banks, there are more interest fish to fry here. Namely pure-play buysiders. Which is why we continue down the list, until we find...

  • Michael Zrihen, Senior Portfolio Manager at Lombard Odier Asset Management, based in Geneva, Switzerland

What does Michael do, and what did he do before?

Current: Senior Portfolio Manager at Lombard Odier


Past: Head of the Euro Short term IRD Market Making and Proprietary Trading at Credit Agricole CIB
        Proprietary Trading, Executive Director at SGCIB
        Co-Head of Euro STIRD desk at SGCIB

IRD means Interest Rate Derivatives means, you guessed it, Lie-bor. And where is that name familiar from? Oh yes. First paragraph above:

Regulators are investigating the possible roles of Michael Zrihen at Credit Agricole, Didier Sander at HSBC and Christian Bittar at Deutsche Bank, the person said on condition of anonymity because the investigation is continuing. The names of the banks and traders were reported earlier by the Financial Times.

So allegedly Zrihen, who now works in Geneva (keep a note of this), manipualted Libor at CA, and is now at Lombard Odier - "Geneva's oldest firm of private bankers and one of the largest in Switzerland and Europe." There is no news on whether Zrihen has been let go by Lombard Odier. Yet.

Next, we continue down the list, until we reach.... Richard Fell:

Well lookee here: another former INTEREST RATE DERIVATIVES TRADER, which means that he likely is that as a PM at his current firm BlueCrest as well. And note also where BlueCrest is based: Geneva, Swizterland.

At this point we decide to do another search: one for Christian Bittar and BlueCrest, and guest what we find, courtesy of Derivatives Intelligence:

The original LinkedIn list continues (much to the likely chagrin of at least one SocGen trader and one more CA-CIB banker), but we have seen enough, and the pattern is forming: it appears that the bankers who were allegedly involved in Libor manipulation in some capacity in their previous lives working for banks, decided to quietly depart under mutually acceptable conditions and find new lives, still trading Libor and IR derivatives, in some of the best known, and even less regulated, Swiss hedge funds and private banks.

Our question then is the following: while much has been said about Lieborgate as being purely associated with the 16 BBA USD fixing member banks, just who else made money, and is the traditionally quiet and always under the radar Swiss financial community about to be exposed for having profits far more from Lieborgate than any of the BBA member banks?

Because if the stigmatized traders were accepted with open arms at various Swiss hedge funds, one would think there may, just may have been, some quid pro quo in the past (for those who have worked in the financial industry this needs no further explanation).

We eagerly await the answer, and perhaps the Swiss regulators to finally wake up to their own "pristeen" financial industry.