Deutsche Bank Ex-Traders Guilty in Libor Rigging Scandal
October 17 2018 - 10:08PM
Dow Jones News
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)
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