Pal, 42, had been a managing director at the bank and for the past six years was the head of U.S. interest rates trading in New York. At least four former Barclays traders who worked under Pal in New York have drawn scrutiny from U.S. prosecutors and regulators in the investigation into the manipulation of the London interbank offered rate and related benchmark interest rates, according to people familiar with the probe.
Barclays ousted Pal, who could not be reached for comment, a month after the bank paid a $450 million fine to reach a settlement with U.S. and British authorities in the interest rate rigging probe.
On July 30, Barclays also terminated Dong (Don) Kun Lee, a New York-based derivatives trader who reported to Pal, for allegedly engaging "in communications involving inappropriate requests relating to Libor." Lee could not be reached for comment.
The regulatory filings disclosing the reasons for the two departures are not normally made public and were provided by a source.
Barclays did not specifically comment on the terminations of Pal and Lee. But said in a statement that "the firm undertook a thorough and robust internal disciplinary process promptly following the regulatory review which was completed in late July."
The dismissals reveal that even after settling with authorities, the full extent of Barclays' role in the rate-rigging scheme is still playing out.
The regulatory filing on Pal also alleged he "engaged in a communication involving an inappropriate request relating to Libor."
The investigation involving the group of former Barclays traders in New York is focusing on an attempt by those traders to manipulate the pricing of Libor to score a bigger profit on interest rate swaps trades.
U.S. authorities, in settling with Barclays, alleged that traders in New York would sometimes ask officials with the bank in London to either submit high or low prices for Libor depending upon how it would benefit their trading positions.
The international investigation is looking at a number of big banks that participate in the process of setting benchmark interest rates. Authorities contend the attempted manipulation dates back to 2005, but people familiar with the process have said Libor manipulation dates back to the late 1990s.
Barclays is the first big bank to settle with U.S. and British authorities, who are investigating allegations of similar conduct by traders at other banks.
A spokeswoman for the Department of Justice in Washington, D.C. declined to comment.
Lawyers familiar with the investigation say federal prosecutors continue to reach out to individuals to gauge interest in cooperating or taking pleas.
They said U.S. prosecutors are expected to begin making decisions in early September about whether to charge individual traders. The lawyers said authorities are furthest along in their investigation with regards to the Barclays traders.
One former Barclays employee also drawing scrutiny in the investigation is Jay V. Merchant, who began working for Barclays in 1998 and remained with the British bank until the end of 2009. Merchant worked for Barclays in New York from 2006 to 2009 and was a top trader reporting to Pal.
Two weeks ago, Merchant left his position as head of swap trading at UBS, shortly after Reuters reported that he had hired an attorney and his activities at Barclays were being examined by investigators.
Reuters previously has reported that Ryan Reich, another trader who was part of Pal's team at Barclays, was fired by the bank in 2010 for sending inappropriate emails about Libor.
