Ex-Rabobank Trader Tells Jury Pitching Libor Wasn't His Job

  • Allen and former colleague Conti accused of Libor rigging
  • Trial is first U.S. prosecution of alleged Libor manipulation

A former Rabobank Groep trader on trial in the U.S. on charges he rigged a benchmark interest rate for four years told a jury that he usually wasn’t involved in making the bank’s submission to rate-setters.

“The cash trader had the expertise. I had no knowledge of the market,” Anthony Allen said in Manhattan federal court Tuesday. As a manager, Allen said he lacked familiarity with the constant stream of information available to his Rabobank colleagues, “You’re building up a constant picture of where Libor is -- that’s the job of a cash trader.”

Allen, who was Rabobank’s former global head of liquidity and finance, took the witness stand Tuesday and disputed prosecutors’ claims that he and a colleague made fraudulent submissions to the British Bankers’ Association, which oversaw the London interbank offered rate. The rate is tied to more than $350 trillion of loans and securities. 

Allen, who oversaw the money market desk in London, and Anthony Conti, a senior trader on the desk, are accused of conspiring with Rabobank interest rate swap traders to skew the bank’s Libor submissions to the BBA to benefit their colleagues’ trading positions and make money.

Allen testified he submitted the rate for the Utrecht, Netherlands-based cooperative only on a “rare number of occasions” when colleagues were out. When he did make those submissions, Allen said he generally relied upon the advice of cash traders who, he said, were more knowledgeable about market conditions.

"I was a manager," Allen said. "Libor was very important, but the fact is, it only took five to ten minutes to click and submit. The whole picture has to be built up over a period of time." 

Three Hours

During almost three hours on the stand Tuesday, Allen also distanced himself from three former colleagues who pleaded guilty to skewing Libor rates, telling jurors he didn’t comply with their requests.

"I didn’t because it was not relevant to the cash market," he said. "It’s not relevant to Libor."

During the trial, which began Oct. 13, former Rabobank traders Lee Stewart, Paul Robson and Takayuki Yagami, who pleaded guilty to the scheme, testified that both Allen and Conti accommodated their Libor submission requests. Robson testified that Allen sat in close proximity to him and could hear his requests to skew the rate to his advantage and never told him to stop.

Allen said his compensation wasn’t tied to the success of these traders, as the U.S. has claimed, and insisted he never made submissions to favor colleagues.

"I’d have no reason to," he said. "I don’t care what position they have."

During the trial, prosecutors showed jurors e-mail messages and chat-room transcripts as evidence they say shows Allen and Conti rigging the benchmark. On the stand, Allen gave a different interpretation of those conversations, insisting that when he replied "OK mate" to a trader’s request for a specific Libor rate, he wasn’t complying. He said he just didn’t want to provoke an argument.


"I wanted to say ‘no,’" Allen said. "I believe I was being non-committal. I didn’t want to get into a discussion," he said. "I didn’t say yes or no."

Allen described how setting the Libor rate became "nearly impossible" during the financial crisis. Jurors saw an e-mail exchange with John Ewan, BBA’s then-director of Libor, expressing his concerns in September 2007 and making some suggestions about redefining Libor.

Ewan replied, "Thanks for this, it is really useful for us to get this sort of insight from people close to the market."

Allen and Conti didn’t fight U.S. requests for extradition from the U.K. and agreed to travel to New York to contest the charges.

They are charged with conspiracy and multiple wire-fraud counts and face more than a decade in prison if convicted. Conti will also take the stand in his own defense after Allen completes his testimony, his lawyer said Monday.

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

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