- Defendant `regularly' manipulated rate on request, jury told
- Ex-trader Conti one of two men on trial in rate-rigging case
An ex-Rabobank Groep trader testified that former-colleague Anthony Conti regularly agreed to manipulate the bank’s Libor submissions to help him make money.
Lee Stewart, then a senior derivatives trader at the Dutch bank’s London desk, told a Manhattan jury Thursday he sat across the trading table from Conti and Anthony Allen, who are on trial together. It’s the first U.S. trial over alleged rigging of the rate by manipulating the bank’s submissions.
Stewart would stand up or lean over their computer trading screens to ask Conti to manipulate the rate to his advantage, he testified. Conti, whose job was to make the bank’s daily Libor submissions, would “regularly” comply, Stewart said.
“I’d say, ‘Tony I’ve got a long one today, so highs would be nice,’” Stewart said. “I’d relate that to him verbally. I’d say, ‘I’m long or short,’ and it was quite clear.”
Stewart said Conti would reply “OK” or “Noted.” Allen, who was Conti’s supervisor, sat within earshot of his requests and never kept Conti from accommodating him, he said. When Conti or another Libor submitter wasn’t present, Stewart said, Allen handled his requests.
“Why were you asking Mr. Conti to make these submissions?” Brian Young, a prosecutor, asked.
“To favor my position,” Stewart said.
“What were you trying to achieve?”
“To make money.”
Stewart testified for more than an hour before U.S. District Judge Jed Rakoff recessed court for the week. He is the first of three former Rabobank traders who pleaded guilty and will testify for the government. Allen and Conti deny wrongdoing.
Seven Rabobank employees, including Allen and Conti, were charged by the U.S. Three pleaded guilty while two other men are considered fugitives. Rabobank made a deferred-prosecution agreement with the U.S. and agreed to pay $325 million to resolve a federal investigation.
Lawyers for Allen and Conti told jurors this week that the U.S. case will fail because their clients always acted to submit the fairest and most accurate Libor submissions with the information available to them, especially during the turmoil of the financial crisis.
Jurors were shown some of the instant messages and e-mails sent by the defendants, Stewart and other Rabobank employees, which prosecutors say are examples of requests to manipulate the bank’s submissions and the defendants’ compliance.
The case is U.S. v. Allen, 14-cr-272, U.S. District Court, Southern District of New York (Manhattan).