- Judge rejects defense lawyers' move to dismiss the charges
- Trial featured testimony of three traders who struck deals
A federal jury in New York is set to hear from two former Rabobank Groep traders in the first U.S. prosecution tied to the alleged manipulation of the bank’s London interbank offered rate, after prosecutors finished presenting their case.
U.S. District Judge Jed Rakoff rejected a request from defense lawyers Monday to dismiss the charges, ruling the government offered enough evidence for the jury to consider them.
Anthony Allen and Anthony Conti, the two former traders on trial, will testify in their own defense, their lawyers said Monday. The government dropped a bid to question both men about statements they made to U.K. authorities who were also investigating allegations of Libor manipulation.
The two former traders at Rabobank in London are accused of making fraudulent submissions to the British Bankers’ Association, which oversaw the Libor rate. The duo and Rabobank cash traders with positions in interest rates swaps conspired in making Libor submissions to the BBA that would benefit their trading positions to make money, according to the U.S.
Allen and Conti face as long as 30 years in a U.S. prison if convicted. They had waived extradition and agreed to travel to the U.S. to contest the charges.
The government’s case featured the testimony of three former colleagues of Allen and Conti -- Paul Robson, Lee Stewart and Takayuki Yagami -- all of whom pleaded guilty to taking part in the scheme and struck deals with the U.S. that might let them off with lower sentences in exchange for their testimony.
The three told jurors Conti and Allen accommodated their requests in making Libor rate submission to the British Bankers’ Association. The benchmark is tied to more than $350 trillion of loans and securities.
Stewart, Robson and Yagami had been part of a Libor-rigging scheme and only implicated Allen and Conti to avoid being imprisoned in the U.S., defense lawyers had told the jury.
Lawyers for both men said it was extremely difficult to estimate the bank’s interest rate leading up to the 2008 financial crisis as credit tightened. Allen’s lawyer said his client never made a false Libor submission while Conti’s lawyer blamed false submissions on other traders of the Japanese yen.
Rabobank entered into a deferred-prosecution agreement with the U.S. and agreed to pay $325 million to resolve a federal investigation. Seven Rabobank employees were charged. In addition to the three who pleaded guilty, the U.S. is seeking the extradition of two others.
The case is U.S. v. Allen, 14-cr-272, U.S. District Court, Southern District of New York (Manhattan).