By Maria Armental 

Two former Deutsche Bank AG traders were found guilty of trying to rig a key lending benchmark that was considered one of the most important barometers of the world's financial health.

Matthew Connolly, who led Deutsche Bank's pool trading desk in New York, and Gavin Campbell Black, a former derivatives trader who worked on the bank's London desk, were convicted Wednesday of conspiracy and wire fraud charges following a monthlong trial in Manhattan federal court.

Sentencing is yet to be scheduled as their lawyers pursue a series of post-trial motions.

"This isn't over," Mr. Connolly's lawyer, Kenneth Breen, said, maintaining Mr. Connolly's innocence and pointing to the jury's split verdict.

Mr. Connolly, 53 years old, was convicted of three of the six charges he faced.

Similarly, Mr. Black's lawyer, Seth Levine, said that while disappointed in the jury's findings, "we will continue to seek justice for Gavin Black."

It was the second trial in the U.S. against traders accused of manipulating the benchmark interest rate for their own benefit.

Two former Rabobank traders were convicted in a similar case in 2015, but their convictions were overturned on appeal.

A series of Wall Street Journal articles in 2008 raised questions about whether global banks were manipulating the interest-rate-setting process by lowballing a key interest rate to avoid looking desperate for cash amid the financial crisis.

The London interbank offered rate, or Libor, is used globally to help set the price of many types of financial contracts, from home mortgages to commercial borrowing.

Libor, which is now being phased out, is calculated every working day by polling major banks on their estimated borrowing costs.

While rate manipulation was widespread, the authorities have said Deutsche Bank was especially aggressive and had slowed the probe by refusing to cooperate fully or misleading investigators.

The German bank in 2015 agreed to pay $2.5 billion in penalties to resolve related charges in the U.S. and the U.K. and a unit in London pleaded guilty in the U.S. to one count of wire fraud.

A Deutsche Bank spokesman declined to comment on Wednesday.

Jean Eaglesham

and Max Colchester contributed to this story.

 

(END) Dow Jones Newswires

October 17, 2018 21:53 ET (01:53 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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