Ex-Deutsche Bank traders avoid prison time for Libor scheme

By Brendan Pierson NEW YORK (Reuters) - Two former Deutsche Bank AG traders will not serve any prison time for conspiring to manipulate the Libor benchmark interest rate between 2005 and 2011, a federal judge ruled on Thursday, sharply criticizing U.S. prosecutors for treating the two men as 'proxy wrongdoers' for a much larger scheme

Reuters October 25, 2019 02:06:57 IST
Ex-Deutsche Bank traders avoid prison time for Libor scheme

ExDeutsche Bank traders avoid prison time for Libor scheme

By Brendan Pierson

NEW YORK (Reuters) - Two former Deutsche Bank AG traders will not serve any prison time for conspiring to manipulate the Libor benchmark interest rate between 2005 and 2011, a federal judge ruled on Thursday, sharply criticizing U.S. prosecutors for treating the two men as "proxy wrongdoers" for a much larger scheme.

Matthew Connolly, who once led Deutsche Bank's pool trading desk in New York, was sentenced by U.S. District Judge Colleen McMahon in Manhattan to six months' home confinement, while Gavin Campbell Black, who worked on the bank's London desk, was sentenced to nine months' home confinement, which he will be allowed to serve in England.

The sentence is a setback for U.S. prosecutors in one of the few criminal cases to emerge from a sweeping probe of Libor rigging. The prosecutors had asked the judge to order "substantial" prison time for both men, saying federal guidelines called for close to 10 years, along with a $3 million (£2.33 million) fine for Connolly and a $2 million fine for Black.

McMahon, however, said the defendants were "low on the totem pole" and that the prosecutors were trying to hold them responsible for behaviour throughout the financial industry.

"You should be sentenced for what you did, but I do think it is fair to say that the government has used Mr. Connolly and Mr. Black... as proxy wrongdoers," she said.

"We're pleased with the court's ruling," Kenneth Breen, Connolly's lawyer, said after the sentencing. Black's lawyer, Seth Levine, had no immediate comment.

The U.S. Department of Justice could not immediately be reached for comment.

Libor, or the London interbank offered rate, underpins trillions of dollars of financial products and is based on what banks say they believe they would pay if they borrowed from other banks. It is to be phased out by 2021.

Investigations on whether banks manipulated Libor have led to billions of dollars in global settlements with financial institutions and U.S. and UK cases against several people.

Two former Rabobank traders were sentenced to prison in the United States, but their convictions were thrown out on appeal.

Connolly was the first U.S. citizen charged with Libor rigging. In a 2016 indictment, prosecutors said that from 2005 to about 2011, he, Black and others conspired to submit false estimates for U.S. dollar Libor rates to manipulate the rate for their own gain.

Deutsche Bank agreed in April 2015 to pay $2.5 billion to resolve U.S. and UK investigations of Libor rigging.

(Reporting by Brendan Pierson in New York; Editing by Dan Grebler)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.