A New York jury convicted two ex-Rabobank traders of rigging a key financial benchmark in the first such trial since the US government pledged in September to hold bankers accountable for wrongdoing.
The verdict in Manhattan federal court is certain to embolden prosecutors investigating possible corruption in the currency, precious metals and US treasury markets. And after a London judge handed Tom Hayes, a former trader at UBS and Citigroup, a 14-year prison sentence for rigging Libor, it indicates that conduct some bankers once defended as routine could now land them behind bars.
Prevailing in a case against individuals was the next challenge for the US Justice Department, which won $2 billion (€1.8bn) in criminal settlements with firms including Rabobank for gaming Libor, a measure tied to more than $350 trillion in loans and securities.
The US has charged 13 people with manipulating the benchmark. Four pleaded guilty. British courts have moved faster, winning one conviction in August when Hayes was convicted and sentenced to 14 years in prison. A second trial, in which six brokers have been accused of helping Hayes rig Libor, is underway in London. The brokers have all pleaded not guilty.
Four-year scheme
In the US, Anthony Allen and Anthony Conti, who both worked in Rabobank's London office, were accused of joining in a four-year scheme to rig the London interbank offered rate, or Libor.
Allen, who’d faced one count of conspiracy and 18 counts of wire and bank fraud, was found guilty of all charges. Conti, who was charged with one count of conspiracy and seven counts of bank and wire fraud, was also found guilty on all counts.
With evidence that included e-mails, instant messages and recorded calls, prosecutors told jurors that both men illegally influenced the rate to favor derivatives traders whose positions were tied to Libor.
Libor is set daily, using data from a poll asking 16 firms to estimate how much it would cost to borrow from each other for different periods and in different currencies. The benchmark is used to determine interest rates on mortgages, commercial loans and derivatives.
