Ex-Rabobank Trader Pleads Guilty to Libor Rigging Charges

  • Paul Thompson is sixth convicted banker from Dutch lender
  • Thompson admits to conspiring with colleagues to rig Yen rate

Former Rabobank Groep trader Paul Thompson admitted to conspiring with colleagues to manipulate benchmark interest rates to give them a trading advantage, becoming the sixth banker from the Dutch lender to be convicted in the global scandal.

Thompson, 50, pleaded guilty in federal court in Manhattan on Thursday after traveling to the U.S. from Australia to face grand jury charges of conspiracy and fraud related to the manipulation of the Yen Libor, which sets the interest rates for borrowing in the Japanese currency. His guilty plea had been expected.

Thompson’s sentencing is scheduled for Nov. 9. He remains free on bail and can return to Australia under terms of his bond agreement, U.S. District Judge Jed Rakoff said.

The Justice Department has been criticized for negotiating billion-dollar settlements with banks for misconduct without charging individuals, but in the years-long investigation into the rigging of the London interbank offered rate, U.S. prosecutors have charged more than a dozen bankers while securing several convictions.

For a QuickTake primer on the Libor scandal, click here.

Thompson’s arrival in the U.S. to face charges underscores that foreign traders ensnared in the Libor scandal aren’t always shielded by their location overseas. 

“This case demonstrates that we will work with our partners around the world to bring to justice those whose crimes threaten our financial markets, wherever they reside,” Assistant Attorney General Leslie Caldwell said in a written statement.

Thompson, who was Rabobank’s head of money market and derivatives trading for Northeast Asia and later executive director of currency trading for Asia, was arrested in Perth in October after the U.S. sought his extradition.

Billions in Penalties

The investigation by several authorities around the world into the rigging of Libor has resulted in $9 billion in penalties for the financial industry. Thompson’s guilty plea comes just over a month after charges were filed in the U.S. against three former traders of Deutsche Bank, two of whom admitted guilt.

Prosecutors accused Thompson and six other Rabobank bankers of scheming with others at the bank to request that their “submitter” improperly modify the bank’s reports to the British Bankers’ Association, which was in charge of collecting interbank borrowing rates, to give them a trading advantage.

Tetsuya Motomura, a former senior trader on Rabobank’s Tokyo desk who was charged in the same indictment with Thompson, remains a fugitive, according to the U.S.

Rabobank agreed to pay more than $1 billion in 2013 to resolve regulators’ claims, including a $325 million penalty from the Justice Department.

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

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