Ex-Rabobank traders seek dis­missal of US charges over Libor scheme

The Pak Banker - - COMPANIES/BOSS -

Two for­mer Rabobank traders urged a US judge to dis­miss an in­dict­ment ac­cus­ing them of en­gag­ing in a scheme to ma­nip­u­late Libor, the bench­mark in­ter­est rate at the cen­ter of a global in­ves­ti­ga­tion into mis­con­duct at sev­eral banks.

Lawyers for An­thony Allen and An­thony Conti told a Man­hat­tan fed­eral judge that pros­e­cu­tors could not show the Bri­tish cit­i­zens' com­pelled tes­ti­mony to a U.K. reg­u­la­tor was not used against them de­spite U.S. rights against self-incrimination.

Michael Schachter, Allen's lawyer, said the case was tainted be­cause a for­mer Rabobank trader who be­came a co­op­er­at­ing wit­ness had pre­vi­ously re­viewed Allen and Conti's com­pelled 2013 tes­ti­mony to the UK's Fi­nan­cial Con­duct Au­thor­ity in a re­lated probe.

As a re­sult, any in­for­ma­tion pro­vided by the trader, Paul Rob­son, to U.S. author­i­ties may have been in­flu­enced by re­view­ing Allen and Conti's tes­ti­mony, he said, caus­ing their state­ments to be used against them in vi­o­la­tion of the U.S. Con­sti­tu­tion.

"It of­fends our sys­tem of jus­tice," Schachter said. But pros­e­cu­tor Brit­tain Shaw ar­gued the Fifth Amend­ment right against self-incrimination was not im­pli­cated when a for­eign gov­ern­ment rather than the United States com­pels tes­ti­mony.

"The United States is the only coun­try bound by the Con­sti­tu­tion," she said. U.S. Dis­trict Judge Jed Rakoff said the case ap­peared to raise a novel, "very in­ter­est­ing is­sue," and said he would is­sue a rul­ing "promptly."

Libor, or the Lon­don in­ter­bank of­fered rate, is a short-term in­ter­est rate that un­der­pins hun­dreds of tril­lions of dol­lars of fi­nan­cial prod­ucts.

US and Euro­pean author­i­ties have been prob­ing whether banks at­tempted to ma­nip­u­late the rate to ben­e­fit their own trad­ing po­si­tions.

The in­ves­ti­ga­tions have re­sulted in $9 bil­lion in set­tle­ments with banks and bro­ker­ages and sev­eral peo­ple be­ing charged. Rabobank agreed in 2013 to pay $1 bil­lion to re­solve U.S. and Euro­pean Libor-re­lated probes, in­clud­ing $325 mil­lion as part of a de­ferred pros­e­cu­tion agree­ment with the Jus­tice Depart­ment.

Conti and Allen are ex­pected to face trial Oct. 5 af­ter plead­ing not guilty to charges that they par­tic­i­pated in a scheme to ma­nip­u­late U.S. dol­lar and yen Libor rates. Three other em­ploy­ees in­clud­ing Rob­son have pleaded guilty, while two oth­ers have not ap­peared in U.S. court. The case is US v. Rob­son, U.S. Dis­trict Court, South­ern Dis­trict of New York, No. 14-cr-00272.

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