19 September 2019
Former Rabobank employee Anthony Allen exits the federal court in Manhattan on Thursday. Photo: Reuters
Former Rabobank employee Anthony Allen exits the federal court in Manhattan on Thursday. Photo: Reuters

Former Rabobank traders convicted in US over Libor rigging

A federal jury found two former traders at Rabobank guilty of fraud in the first US trial arising from a global investigation into manipulation of Libor, the leading benchmark for pricing financial transactions around the world.

Anthony Allen, Rabobank’s former global head of liquidity and finance, and Anthony Conti, a former senior trader, were convicted in a district court in Manhattan on every count of conspiracy and wire fraud they faced, Reuters reported.

The verdict marked a victory for the US Justice Department, which brought charges against the British citizens a year after the Netherlands-based bank in October 2013 reached a US$1 billion deal resolving related US and European probes.

“Today’s verdicts illustrate the department’s successful efforts to hold accountable bank executives responsible for this global fraud scheme,” Leslie Caldwell, head of the Justice Department’s criminal division, said in a statement.

Allen, 44, slumped over a table in court as the jury foreman read the verdict, while Conti, 46, held his head up. Lawyers for both men said they planned to appeal.

Libor, or the London interbank offered rate, is a short-term rate financial institutions charge each other for loans that is calculated based on submissions by a panel of banks.

Hundreds of trillions of dollars in short-term interest rates, swaps and other financial products are pegged to Libor.

The case was the first by the Justice Department to go to trial following global investigations into whether banks submitted artificial rate estimates to bolster profits on trading derivatives tied to Libor.

Those investigations resulted in charges against 22 people in the United States and United Kingdom and around US$9 billion in regulatory settlements with financial institutions.

Their trial follows an earlier one in London involving yen Libor manipulation that led to the conviction of Tom Hayes, a former UBS AG and Citigroup Inc. trader who was sentenced in August to 14 years in prison.

Another trial is ongoing in London for six former brokers accused of manipulating yen Libor rates. They have pleaded not guilty.

Among the 13 people charged by the Justice Department were seven former Rabobank traders, including Allen and Conti, who earlier this year waived their right to extradition to fight the charges.

Prosecutors said Allen, 44, and Conti, 46, participated in a five-year conspiracy at Rabobank to rig US dollar and yen Libor rates in order to gain an unfair advantage trading derivatives linked to the rate.

Prosecutors relied on testimony by three former Rabobank traders who pleaded guilty as part of cooperation deals, as well as emails and instant messages they sent at the time.

Libor was supposed to be an “impartial market tool”, Paul Robson, one of the traders, testified.

“But we were biasing submissions or shading it to help the traders,” he said.

Lawyers for Allen and Conti countered that while others at the bank may have been trying to rig Libor, their clients had submitted honest rate estimates.

They argued prosecutors took documents out of context, and that cooperating witnesses lied about their clients’ role in the scheme in hopes of getting lenient sentences.

Allen opted to testify in his own defense, telling jurors he rarely was involved personally in submitting numbers used to calculate Libor and that he in those few instances ignored traders’ requests to bias the rate.

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