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Sunday 25 September 2016

British ex-bankers jailed in US over Libor scandal

Published 11/03/2016 | 02:31

Two British ex-bankers have been jailed for their role in the Libor scandal
Two British ex-bankers have been jailed for their role in the Libor scandal

A New York judge has sentenced two British former bankers to prison for their roles in manipulating the Libor primary benchmark for global short-term interest rates.

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US District Judge Jed Rakoff sentenced Anthony Allen to two years and Anthony Conti to a year and a day.

The former employees of Dutch bank Rabobank were convicted in November of conspiracy and other charges for their roles in manipulating the London inter-bank lending rate.

Libor is used by banks to borrow from each other and affects trillions in contracts around the world, including mortgages, bonds and consumer loans.

While announcing the sentences, Judge Rakoff criticised the US government's failure to prosecute individuals from large financial institutions in connection with the 2008 financial crisis.

He said he was "mystified" that prosecutors went only after institutions, since punishing individuals had a deterrent effect on others in a profession where stepping over boundaries can be tempting if there is seemingly no penalty for doing so.

The judge said the United States, breaking a tradition of pursuing individuals when widespread financial crimes occurred, had decided after the most recent financial crisis that it was best "extracting money from corporate parents, usually at the cost to their innocent shareholders".

In a social comment, he also condemned what he called "mass incarceration" in America that falls particularly harshly on black communities.

Judge Rakoff noted there are more than two million people in US prisons and about 40% of the population is black men, who are disproportionally imprisoned. He said it was "mass incarceration to which this country suffers to its total shame".

He said the crimes of Allen and Conti, both of whom are white and in their 40s, called for prison sentences, but nothing near the decades in prison that the charges could bring.

Both were convicted last year by a jury that spent weeks hearing evidence compiled in a Justice Department probe of what was described as a global fraud scheme.

The investigation into the manipulation of a composite of the interest rate used by London banks when they borrow money from one another also resulted in the conviction in London of Tom Hayes, a former bank executive in the UK. He is serving an 11-year sentence, though Judge Rakoff noted that he was unlikely to serve more than five and a half years.

Conti, of Essex, was a senior banker who handled US dollars while Allen, of Hertfordshire, was the global head of cash, at Rabobank in London when prosecutors said the scheme was carried out from 2005 to 2011.

Before the sentencing was announced, Allen told the judge he wished he had rejected the requests by others to influence the interest rate.

He said he wished his "radar was more tuned in" and now feared for his two young daughters who are "no longer happy-go-luck bubbly girls".

Conti asked the judge for compassion, saying he worried about the effect on his family.

Press Association

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