First Libor Criminal Trial in the US Kicks Off

The first ever criminal trial in relation to the Libor interest rate scandal in the United States began earlier this month. Two Britons, Anthony Allen and Anthony Conti, both former London-based traders at the Dutch bank Rabobank, have been accused of conspiring to submit fraudulent rate reports for the benchmark known as Libor (London interbank offered rate) in order to help colleagues profit on trades. Their scheme spanned from 2006 to 2011, according to the indictment. Anthony Allen, the lead defendant in the case, took the stand on Tuesday. Allen offered point-by-point rebuttals of prosecution charges that he was involved in the conspiracy.

The trial follows one that occurred earlier this year in London, where Tom Hayes, a former UBS and Citigroup trader was convicted of conspiring with others to manipulate Libor. Mr. Hayes, who was sentenced to 14 years in prison, is appealing. A separate trial of six former brokers who are accused of assisting Mr. Hayes kicked off in London earlier this month.
What is Libor?

Libor rates are set daily just before noon London time after a tally of submissions by 16 banks, with the four highest and lowest excluded and the remaining eight submissions averaged. The resulting benchmarks are intended to represent rates at which banks can borrow from one another for short periods ranging from overnight to three, six or twelve months. Questions about the accuracy of the rates emerged just before the financial crisis unfolded in 2008, as interbank lending froze up when fears arose about banks’ survival.
Abuse of Libor – what to do if you are involved

Abuse of interest rates and the failure to address the problem is one of the most expensive scandals since the financial crisis. If you find yourself caught up in the scandal, the consequences have proven to be very serious, and can even result in severe criminal sanctions. Our Financial Crime, Civil Fraud & Regulatory team are fully equipped to deal with such cases, and we can offer support on both the civil and criminal side of proceedings in multiple jurisdictions, including the U.S. Pamela Reddy, a Partner in the department at SM&B, is currently acting for a number of individuals at various financial institutions in relation to the Libor scandal. As well as Libor, Pamela has expertise in acting for individuals in relation to insider dealing and market abuse generally. If you wish to discuss anything in this article or any specific needs you may have, please do not hesitate to contact Pamela Reddy.