Paper trail ‘a mile long’: Rabobank traders’ e-mails at core of US Libor-rigging trial
A “mile long” paper trail left by two former Rabobank Groep traders is all the proof needed to convict them of rigging the crucial Libor rate, prosecutors said in closing arguments at the first US trial over the benchmark.
Anthony Allen and Anthony Conti left enough evidence the two engaged in a four-year scheme to manipulate the London interbank offered rate, federal prosecutor Brian Young told jurors in Manhattan Tuesday before they began deliberations. Defence lawyers countered that the men instead made a “good faith effort” when submitting a benchmark rate and that e-mails and chats failed to show their clients intended to defraud anyone.
Allen and Conti, who were based in London, are accused of rigging the rate to favour the positions of interest rate swap traders. Charged with conspiracy and multiple counts of wire and bank fraud, both could face a decade in prison if convicted.
Michael Schachter, an attorney for Allen, told jurors on Tuesday the government had failed to find sufficient proof against the former trader. The majority of Rabobank’s Libor submissions presented during the trial aligned with rates that 15 other banks on the benchmark panel submitted, he said.
“Saying ‘OK’ is not a crime,” Schachter told the jury. “Submitting a fraudulent rate in order to help a trader’s book is a crime.”
Allen testified during the trial that he’d ignored e-mail requests from interest swap traders pushing rate submissions that would favour their positions. He said he typically answered “OK” or didn’t answer at all. Young called Allen’s explanation “gibberish” and “nonsensical.”
“There is no such thing as free money and nobody knew that better than the two defendants,” the prosecutor said. “Year after year, they ran a scam designed to get ahead of their counter-parties.”
US investigators found only 12 messages during the alleged four-year scheme which involved Allen, none of which showed he actually submitted a fraudulent rate and only three of which he responded to, Schachter said.
“Of all these e-mails there are only these three communications where Tony Allen says ‘We’ll do our best,’ or ‘OK,’” Schachter said. “He doesn’t say ‘yes,’ he doesn’t say ‘no,’ he says ‘we’ll do our best’.”
Aaron Williamson, Conti’s lawyer, said the evidence showed that interest rate swap traders concealed their scheme from his client, who was in charge of the bank’s US dollar Libor submission.
“Tony Conti wasn’t in their scheme to manipulate the rate,” Williamson told jurors. “Tony believed Libor was an estimate. He couldn’t determine Rabobank’s precise rate every day.”
“There is ample evidence to doubt that Tony intended to defraud anyone,” Williamson said.
