Two bankers from Britain have been convicted in a US court of conspiring to manipulate a key interest rate in order to earn money for their bank and colleagues.
Co-defendant Anthony Conti was convicted of conspiracy to commit wire fraud and bank fraud, along with 8 other charges.
“This is round one,” said Michael Schachter, Allen’s lawyer. Tor Ekeland, an attorney for Conti, said they would pursue all legal options.
Conti was a senior banker who handled U.S. dollars while Allen was the global head of cash at the Dutch bank Rabobank when prosecutors said the scheme was carried out from 2005 to 2011.
The London interbank offered rate, known as LIBOR, is used by banks to borrow from each other and affects trillions of dollars in contracts around the world, including mortgages, bonds and consumer loans.
Regulators in Britain, Switzerland, the U.S. and Asia have been investigating the banks’ conduct for months, and negotiating settlements with banks.
Netherlands-based Rabobank agreed two years ago to pay about $1 billion to settle U.S., British and Dutch charges of manipulating the key global interest rate. The payout included a $325 million deal with the U.S. Justice Department to allow the bank to avoid criminal prosecution in exchange for cooperation.
U.S. District Judge Jed Rakoff rejected a request that bail be revoked.
“I’m not particularly worried Mr. Conti or Mr. Allen will flee,” he said.
Hinting at a measure of leniency likely at sentencing, Rakoff said the men probably would have faced more prison time if they had been prosecuted in London.
He said they would be foolish to flee, making them “pariahs for life.”
Outside court, juror Howard Wasserfall noted that Allen’s nicknames at the bank included “Ghostie” and “Casper,” signifying that as a manager he “always knew he’d be a figure in the background” as co-workers pleaded for them to manipulate interest rates to benefit their trades.
Wasserfall said it was significant there was no evidence Allen ever told anyone: “Hey, maybe we’re putting too much stock in what the traders are saying.”
TAP – If British bankers start playing Wall Street games, they end up in court. Fraud is only for the people at the very top.