Two former Deutsche Bank interest rate traders have been found guilty by a New York jury of a scheme to manipulate the London Interbank Offered Rate (Libor) benchmark fix.
The two men, New York-based Matthew Connolly and London-based Gavin Campbell Black remain on bail pending post-trial motions likely to be complete in the first quarter of 2019. Connolly was found guilty on three of six counts, while Black was found guilty of two counts.
“Matthew Connolly and Gavin Black undermined the integrity of our financial markets by manipulating Libor, which is widely considered to be the most important number in the financial world because of its impact on trillions of dollars in financial products,” says US assistant attorney general Brian Benczkowski of the US Department of Justice (DoJ). “The Justice Department and its law enforcement partners will aggressively investigate and prosecute individuals and financial institutions who engage in this sort of misconduct.”
Assistant attorney general Makan Delrahim, adds, “Today’s convictions demonstrate our continuing commitment to prosecute those who fraudulently manipulated the financial markets for their own personal benefit and, in doing so, undermined free market competition. Such conduct will not be tolerated by this administration, especially when it threatens to destabilise global markets and financial stability worldwide. This case is a compelling example of effective coordination among law enforcement agencies – both at home and abroad. The Antitrust Division will continue to work with its many partners to aggressively pursue other individuals involved in this or other illegal schemes that undermine free financial markets.”
Although banks have paid US regulators billions in dollars in fines relating to Libor manipulation, individual convictions in the US have been harder to come by. Previously two Rabobank traders, Anthony Allen and Anothony Conti were convicted and sentenced to two year and one year in jail respectively, however their convictions were overturned on appeal. Equally, two former Deutsche Bank traders, Michael Curtler and Timothy Parietti, pleaded guilty as part of an agreement to give evidence for the prosecution in the trial of Connolly and Black.
Lawyers for Connolly and Black have publicly stated their intention to make several post-trial motions including, presumably, appeal.