Two Deutsche Bank traders indicted over Libor manipulation

WASHINGTON: The US Justice Department indicted two former Deutsche Bank traders Thursday for involvement in a scheme to manipulate the Libor dollar interest rate, crucial to financial contracts around the world.

The department said that between 2005 and 2011, Matthew Connolly of New Jersey and Gavin Campbell Black of London, worked with at least eight others to artificially fix the daily benchmark rate to benefit their own and their banks’ derivative positions.

The charges were only the latest in a sprawling international case that has seen traders from several banks charged, hit with steep fines and jailed, and the banks themselves heavily fined.

Connolly was Deutsche Bank’s supervisor of the Pool Trading Desk in New York, and Black was a derivatives trader in London when the manipulation took place.

Connolly was arrested on Thursday and was expected to appear in court in New York.

The Justice Department said a third trader at the bank, Michael Cutler of London, pleaded guilty last year to wire and bank fraud charges in the case.

“By corrupting this important benchmark rate, the defendants undermined the integrity of financial markets here and around the world,” Deputy Assistant Attorney General Brent Snyder said in a statement.

Last year Deutsche Bank agreed to pay US$2.5 billion to settle charges in the case with British and US authorities.

Five other banks have reached settlement deals with US authorities in the case, including Barclays Bank, UBS, RBS, Rabobank, and Lloyds Banking Group.

A total of 13 individuals have been charged by US authorities.

The probe is continuing in London as well, where more than 20 people have been charged. — AFP