Saturday 24 August 2019

Two British ex-bankers convicted in Libor rate trial

Anthony Allen worked at Rabobank in London as the global head of liquidity and finance (AP)
Anthony Allen worked at Rabobank in London as the global head of liquidity and finance (AP)

Two British ex-bankers have been convicted of conspiring to manipulate the primary benchmark for global short-term interest rates so that their bank and fellow traders could earn higher profits.

Anthony Allen, 44, from Hertfordshire, shook his head as the guilty verdicts were announced in Manhattan federal court on conspiracy to conduct wire fraud and bank fraud and 18 other charges carrying potential penalties of decades in prison.

His co-defendant, Anthony Conti, 46, from Essex, was convicted of conspiracy to commit wire fraud and bank fraud and eight other charges stemming from a Justice Department probe into what assistant attorney general Leslie Caldwell described as a "global fraud scheme". He also could face decades in prison, though they are likely to face far less.

Caldwell noted in a statement that 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 was sentenced in August to 14 years in prison.

"This is round one," said Michael Schachter, Allen's lawyer. Tor Ekeland, an attorney for Conti, said they would pursue all legal options.

Conti was a senior banker who handled US dollars while Allen was the global head of cash at the Dutch bank Rabobank when prosecutors said the scheme was carried out from 2005 to 2011. Besides Allen and Conti, three other former Rabobank employees have been convicted in the probe while two others await prosecution.

The London interbank offered rate, known as Libor, is used by banks to borrow from each other and affects trillions of dollars in contracts around the world, including mortgages, bonds and consumer loans.

Regulators in Britain, Switzerland, the US and Asia have been investigating the banks' conduct for months, and negotiating settlements with banks.

Netherlands-based Rabobank agreed two years ago to pay about one billion dollars (£660 million) to settle US, British and Dutch charges of manipulating the key global interest rate. The payout included a 325 million dollar (£214 million) deal with the US Justice Department to allow the bank to avoid criminal prosecution in exchange for co-operation.

US district judge Jed Rakoff rejected a request that bail be revoked.

"I'm not particularly worried Mr Conti or Mr Allen will flee," he said.

Hinting at a measure of leniency likely at sentencing, Judge Rakoff said the men probably would have faced more prison time if they had been prosecuted in London.

He said they would be foolish to flee, making them "pariahs for life".

Outside court, juror Howard Wasserfall noted that Allen's nicknames at the bank included Ghostie and Casper, signifying that as a manager he "always knew he'd be a figure in the background" as co-workers pleaded for them to manipulate interest rates to benefit their trades.

Wasserfall said it was significant there was no evidence Allen ever told anyone: "Hey, maybe we're putting too much stock in what the traders are saying."

PA Media

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