Ex-Rabobank Trader Thompson Sought by U.S. Arrested in Australia

  • Thompson ran Northeast Asia money market, derivatives trading
  • He faces U.S. indictment for conspiracy to manipulate Libor

A former Rabobank Groep trader charged by U.S. authorities with taking part in a scheme to manipulate benchmark interest rates was arrested this week in Australia, according to the Australia Attorney-General’s Department.

Paul Thompson, who is among seven Rabobank traders indicted in New York, was taken into custody in Perth on Thursday by authorities, according to the e-mailed statement issued on Saturday. The U.S. sought Thompson’s extradition to face prosecution for wire and bank fraud, according to the statement.

Thompson was the Dutch bank’s head of money market and derivatives trading for Northeast Asia, according to a U.S. Justice Department statement. He was indicted by a federal grand jury for allegedly conspiring to manipulate the London interbank offered rate. Two former Rabobank traders -- Anthony Allen and Anthony Conti -- are currently on trial in Manhattan.

Peter Carr, a Justice Department spokesman, referred questions about the arrest to Australian authorities and declined to comment further. Hendrik Jan Eijpe, a spokesman for Utrecht-based Rabobank, declined to comment. There was no lawyer listed for Thompson on the U.S. case docket.

The charges against the traders stem from a global investigation into the manipulation of Libor by banks, a probe that has spawned investigations into other markets, such as currencies and precious metals. 

In the U.S., the Justice Department has won about $2 billion in criminal penalties from banks including Barclays Plc and UBS Group AG. Rabobank agreed to pay more than $1 billion in 2013 to resolve regulators’ claims, including a $325 million penalty from the Justice Department. 

First Trial

The trial of Allen and Conti is the first in the U.S. against individuals for allegedly conspiring to manipulate Libor, a benchmark rate tied to more than $350 trillion of loans and securities. The two traders, who waived extradition and agreed to travel to the U.S. to contest the charges, could be sentenced to more than a decade in prison if convicted. Three other ex-Rabobank traders have pleaded guilty.

U.S. District Judge Jed Rakoff, who is overseeing the trial, has raised concerns about the delay in bringing Rabobank traders to the U.S. to face charges. At a hearing in Manhattan federal court last year, he asked prosecutors why it was taking so long to extradite Thompson and another fugitive in the case, Tetsuya Motomura, suggesting it should be a priority for the government.

A Justice Department lawyer said the office that handles extradition requests was working on the matter.

“Given the nature of this case and assuming the government’s allegations are correct, the need of people throughout the world to see that some justice is done, that that should be delayed,” Rakoff said, “seems to me unpalatable.”

The case is U.S. v Allen, 14-cr-272, U.S. District Court, Southern District of New York (Manhattan).

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