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* Hearing set in London court for May 27
* Ryan Reich, Jay Merchant's lawyers say clients refuteallegations
* Sixteen charged so far in global Libor investigation (Repeats with additional reporting credit. No changes to text.)
By Kirstin Ridley
LONDON, April 28 (Reuters) - Britain on Monday filed itsfirst criminal charges against U.S.-based Libor traders, as theUK arm of a complex global investigation into alleged benchmarkinterest-rate rigging stretches across the Atlantic.
The Serious Fraud Office (SFO) charged three former tradersat British bank Barclays - director of dollarfixed-income swaps Jay Merchant and dollar interest ratederivative traders Alex Pabon and Ryan Reich - with conspiracyto defraud in connection with its Libor inquiry.
A provisional hearing has been scheduled for the three men,who the SFO confirmed were currently in the United States, atWestminster Magistrates Court in London on May 27.
Lawyers for Reich and Merchant, Ben Rose of Hickman and Roseand Brian Spiro of BCL Burton Copeland, respectively, said theirclients refuted any allegations of wrongdoing.
"He (Reich) is not guilty of this offence and willvigorously contest these allegations at his forthcoming trial,"Reich's lawyer said in an emailed statement.
Merchant's lawyer said: "Should this matter proceed, he (JayMerchant) has no doubt that he will be fully vindicated and itwill be shown that he acted at all times in a right and propermanner."
Pabon's London lawyer was not immediately available forcomment.
The charges could prompt the first extradition to Britainfrom the U.S. in the lengthy investigation into the allegedrigging of Libor (London interbank offered rate), a central cogin the global financial system.
The SFO, which has now charged 12 in connection with itscriminal Libor investigation, declined to comment on anyextradition request or give further details about the charges.
The investigation into benchmark interest rates has beenovershadowed by a parallel inquiry into allegations offoreign-exchange market rigging, which on March 5 reached intothe heart of London's financial establishment when the Bank ofEngland suspended a staff member.
However, the inquiry into alleged fixing of Libor andrelated Euribor rates, against which around $450 trillion offinancial contracts from derivatives to consumer loans arepriced, has so far seen U.S. and European authorities fine 10banks and brokerages $6 billion and charge 16 men.
The SFO in February charged three former London-basedBarclays Libor submitters - Peter Johnson, Jonathan Mathew andStylianos Contogoulas - over a two-year scheme to rig rates andin March charged three former ICAP brokers withfraud-related Libor offences.
SETTLEMENT
Barclays was the first bank to settle U.S. and UK regulatoryallegations of rate manipulation, paying around $450 million infines in 2012. But even regulators admitted privately they weretaken aback by an ensuing public and political backlash, whichforced out four top Barclays directors, sparked a fraud squadprobe and several parliamentary reviews.
In their case to date against former London-based Barclaystraders already charged, SFO lawyers have said they have siftedthrough "vast amounts" of documents, adding that much of theevidence against Johnson, Mathew and Contogoulas was in emailform.
The three men, who are next expected to appear in courttowards the end of July, are the first to face charges for thealleged manipulation of the U.S. dollar-denominated Libor rate. Ten other men face U.S. and UK criminal charges for manipulatingyen-denominated Libor.
The SFO has already charged three other men as part of itsLibor investigation, including Tom Hayes, a former yenderivatives trader at UBS and Citigroup, whopleaded not guilty in December.
Hayes is due to stand trial in January 2015 on eight chargesof conspiring with staff from at least 10 major banks andbrokerages to manipulate yen Libor rates between 2006 and 2010.
Terry Farr and James Gilmour, two brokers from RP Martin,have been charged and pleaded not guilty to similarfraud-related offences. Their trial has been scheduled forSeptember 2015, in part to allow the SFO time to bring chargesagainst further alleged co-conspirators. (Additional reporting by Esha Vaish and Karen Rebelo inBangalore; Editing by Erica Billingham)
