Ex-Rabobank traders face US Libor trial

Two former Rabobank traders from Britain are set to become the first defendants to face trial in the US on charges stemming from a global investigation into whether various banks sought to manipulate the interest rate known as Libor.

Jury selection is scheduled to take place today in Manhattan federal court in the case of Anthony Allen, 44, and Anthony Conti, 46, who are accused of helping manipulate interest rates to benefit the Dutch lender’s trading positions.

The case is the first by the US justice department to go to trial over allegations that financial institutions manipulated Libor, the London interbank offered rate, a short-term rate banks charge each other for loans.

The rate, which was overseen by the British Bankers’ Association, is calculated based on submissions by a panel of banks. It underpins $450trn of financial products globally, from mortgages to credit card loans.

US and European authorities have been investigating whether banks fraudulently submitted artificial rate estimates to the association to bolster their profits on trading derivatives linked to Libor.

Those investigations have resulted in charges against 22 people in the US and UK and around $9bn in regulatory settlements with financial institutions.

Those banks include Netherlands-based Rabobank, which, as part of a $1bn deal resolving US and European Libor-related probes, agreed in 2013 to pay $325m as part of a deferred prosecution agreement with the justice department.

Mr Allen, Rabobank’s former global head of liquidity and finance, and Mr Conti, a senior trader, were indicted in the US in October 2014.

The indictment accuses Mr Allen, who supervised Rabobank’s Libor submission process, of directing its traders to advise those who made its Libor submissions about financial interest they had in the rate.

Ex-Rabobank traders face first U.S. trial over Libor manipulation http://t.co/X0p7eeKizh

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Prosecutors contend that rate submitters, who included Mr Allen, were meanwhile told to make US dollar and yen Libor submissions that favoured the traders’ positions.

Prosecutors allege that Mr Conti frequently accommodated the traders’ requests, in communications captured in emails and chat logs.

Mr Allen and Mr Conti, both UK citizens, this year pleaded not guilty after becoming the first of 13 people charged by the justice department in the probe to waive their right to extradition to fight the charges in the US.

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

Another trial in London kicked off this week for six former brokers accused of manipulating yen Libor rates. They have pleaded not guilty.