U.S. appeals court throws out Deutsche Bank traders’ Libor-rigging convictions

NEW YORK (Reuters) – A US appeals court on Thursday overturned the convictions of two former Deutsche Bank traders for forging Libor, which was among the world’s most important financial standards, and ordered the two men acquitted. .

The U.S. Court of Appeals for the Second Circuit in Manhattan found a lack of evidence that Matthew Connolly and Gavin Black caused Deutsche Bank to file false notes by Libor.

Connolly, of Basking Ridge, NJ, had led Deutsche Bank’s collective trading office in New York, while Black worked in the bank’s money market and derivatives office in London.

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Both were convicted of fraud and conspiracy in October 2018.

Connolly was sentenced to six months in the home and fined $100,000, while Black received nine months at home and a $300,000 fine. Federal prosecutors sought “long” prison terms for both.

The US Department of Justice did not immediately respond to a request for comment.

“We are thrilled that Matt Connolly has been fully acquitted in this fabricated case,” said Kenneth Breen, partner at Paul Hastings.

Black’s attorney, Seth Levine, partner at Levine Lee, “highly appreciated” the outcome. “Mr. Black did his job, living his life with honor and honesty,” said Levine.

Before it was phased out this month, LIBOR, or the London interbank offered rate, backed hundreds of trillions of dollars in financial products including credit cards, mortgages and other loans. Libor was calculated once based on submissions from 16 banks, including Deutsche Bank.

Prosecutors said Connolly directed his subordinates to arrange false submissions consistent with the interests of traders, while Black encouraged false submissions to benefit his derivatives trading. The alleged plot ran from 2004 to 2011.

Investigations into Libor fraud have resulted in $9 billion in fines worldwide for banks, including $2.5 billion for Deutsche Bank in 2015.

The trial of Connolly and Black was the second in the United States for a dealer accused of forging Libor for their own benefit. The convictions of two former Rabobank dealers in London in 2015 were also overturned on appeal.

The case is United States v. Connolly et al., US Court of Appeals for the Second Circuit, No. 19-3806.

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(Covering) By Jonathan Stemple in New York Editing by Francis Kerry and Leslie Adler

Our Standards: Thomson Reuters Trust Principles.

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