The New York Times reports:
A jury in Manhattan on Thursday November 5th, found two former London traders guilty in the first convictions in the United States stemming from the global investigation into the rigging of an interest rate benchmark known as Libor.
As the jury foreman began reading out the verdicts on the 19 counts of fraud and conspiracy against Mr.Anthony Allen and the nine for Mr. Anthony Conti, Mr. Allen slumped low in his chair, his chin resting on his left fist. As the guilty verdicts slowly tallied all 28 counts, he stared off to his right, away from the jury seated to his left.
Now consider this salient fact!
The verdict against the two, Anthony Allen and Anthony Conti, took less than a day and a half of deliberation, and was a surprisingly quick victory for the Justice Department as it makes a renewed effort to prosecute individuals for financial crimes.
Trying the two former Rabobank traders before a jury presented a challenge for prosecutors, resting in part as it did on the arcane technicalities of how Libor is calculated.
Submissions for Libor benchmarks are made at a certain time in London in different currencies and for numerous different short-term maturities in the hundredths of a percentage point.
Yet this Manhattan jury took less than 9 hours to give their unanimous verdicts, and in so doing, they sent a very strong message, not only to the two bankers, who must now be looking at some serious gaol-time, but also to the criminal banking fraternity at large, if you cannot do the time, then don’t do the crime!
Right after the verdict, one juror, Howard Wasserfall, said that “it was pretty obvious to us something was going on that was interfering with the way the Libor rate was supposed to be” calculated.
A retired mail carrier, Mr. Wasserfall pointed to the emails and text messages among the traders that the prosecutors presented and especially to the testimony from three other former Rabobank traders who had earlier pleaded guilty to participating in the scheme.
Despite the complexity, the jurors appeared to take a lively interest in the specifics of the case, with more than a half-dozen taking notes regularly during the trial.
“I think this shows that the government can obtain convictions even in complicated cases, and this was not the simplest case,” said John Coffee, a law professor at Columbia University.
So, straight away we can give the lie to the oft-repeated mantra so beloved by UK regulators, that it is too difficult to try these kinds of cases in front of juries.
I have been saying and blogging for some time now that the criminalisation of British bankers for the plethora of disgraceful crimes which they have been allowed to commit with impunity, would ultimately be dealt with by American prosecutors and juries.
When you commit offences which have international ramifications, and which impact the interests of US citizens, you are taking a huge risk that you will face trial in a US Court.
The trial of Allen and Conti began on Oct. 14. Prosecutors said the defendants had conspired to submit bogus rates to be used in calculating Libor, which is based on submissions from 16 banks, to help other Rabobank traders make more money on trades in which they stood to gain from a higher or lower interest rate.
Allen, the global head of liquidity and finance, supervised Conti, a senior money markets trader who made daily Libor submissions.
Conti, is a British citizen and a former senior trader with Rabobank.
The journey for the two men, both British citizens, to Federal District Court in Lower Manhattan was the product of a long-running push by regulators and law enforcement in a number of countries to investigate the manipulation of Libor, the benchmark used by banks to set interest rates on mortgages, credit cards and other kinds of loans.
More than a half-dozen banks, including the Dutch bank the two men worked for, Rabobank, have now paid more than $10 billion to settle charges with regulators and law enforcement agencies that they conspired to rig Libor.
Leslie R. Caldwell, the assistant attorney general for the criminal division of the Justice Department, said: “Today’s verdicts illustrate the department’s successful efforts to hold accountable bank executives responsible for this global fraud scheme.”
The convictions on Thursday will now embolden prosecutors as they weigh whether to bring cases against individuals in the currency manipulation scandal.
“The Libor cases have been a symbol of the department’s commitment to taking on the major banks,” said Brandon L. Garrett, a professor at the University of Virginia law school. “I think it was very important for the government to show that both individuals and the corporations will be held criminally accountable.”
Prosecutor Brian R. Young said the defendants had “left a paper trail a mile long,” and had been “active and enthusiastic participants” in a scheme with other Rabobank traders.
These verdicts should mark the start of a long campaign of attrition against criminal banksters who have committed so many crimes in the past few years.
The behaviour identified was so blatant and so cynical and carried out by bankers of senior status, that it should be seen as a warning to Governments and regulators not to start de-regulating or backtracking on hitherto accepted standards of desirable regulation of the financial sector.
Give these criminals an inch and they will steal a mile.