DOJ lashes back at ex-Deutsche Bank traders requests for acquittal in LIBOR manipulation case

Maria Nikolova

The US Government argues that Matthew Connolly’s and Gavin Campbell Black’s motions for a judgment of acquittal or a new trial fail to identify any genuine gaps in the proof at trial.

About two months after former Deutsche Bank traders Matthew Connolly and Gavin Campbell Black, found guilty of rigging LIBOR, moved for acquittal or a new trial, the Department of Justice (DOJ) has responded to these claims.

In a set of documents filed on Monday, February 4, 2019, with the New York Southern District Court, the US Government seeks to prove that the defendants’ latest motions fail to raise any issue that warrants acquittal or a new trial. The defendants’ motions should be denied, the US authorities insist.

The DOJ explains that the jury heard more than enough evidence to find all elements of the crimes alleged against Black and Connolly beyond a reasonable doubt. The co-conspirators’ testimony also established that the defendants participated in the scheme, the DOJ says. Mr King (one of the co-conspirators), for example, described how he received requests from Gavin Black and Matthew Connolly to change Deutsche Bank’s LIBOR submissions to suit its trading positions.

Here are a couple of examples:

  • Bloomberg chat with Gurjit Dehl, in which Mr. Black asked “can we have a high 6mth libor today pls gezzer?”
  • Bloomberg chat with Mr. King, in which Mr. Black asked “COULD WE PLEASE HAVE A LOW 6MTH FIX TODAY OLD BEAN?”.

Furthermore, the DOJ argues against the defendants’ assertion about there having been a “reasonable range” within which LIBOR submitters were free to select their submissions with reference to their banks’ trading positions. The DOJ stresses that the evidence at trial did not establish such a range ever existed. According to the Government, the defendants forcefully made that argument at trial, but the jury rejected it. Mr. King, Mr. Curtler, and Mr. Parietti (the co-conspirators) all testified, not only was that not their understanding, but they had never heard the concept of a “reasonable range” until after the investigation began.

The argument about the alleged widespread practice of LIBOR manipulation at Deutsche Bank was also attacked by the DOJ. The US authorities said that “even if supervisors directed or encouraged the fraud, that is not a defense to illegal conduct.

The “I was following orders” excuse is not equivalent to a good faith defense”, DOJ says.

Also, the defendants’ attempt to shift the blame to Deutsche Bank’s training and the prevalence of the fraudulent conduct should likewise be rejected, according to the US Government. That the defendants were not specifically trained not to manipulate LIBOR is seen not to negate their fraudulent intent.

Connolly was Deutsche Bank’s director of the Pool Trading Desk in New York, where he supervised traders who traded USD LIBOR-based derivative products. Black was a director on Deutsche Bank’s Money Market and Derivatives Desk in London, who also traded USD LIBOR-based derivative products.

In October 2018, a jury convicted Connolly and Black for their participation in a scheme to manipulate the London Interbank Offered Rate (LIBOR).

Read this next

Digital Assets

Europe bans crypto payments to Russians as €10K cap scrapped

The European Union is taking further steps to sanction Russia after the recent developments surrounding its invasion of Ukraine.

Digital Assets

Mt. Gox creditors to get their funds through Bitstamp, other exchanges

The distribution of funds to creditors of the defunct crypto exchange Mt. Gox is set to kick off as the business’s Japanese bankruptcy trustee released a memo updating them of a new function and important deadlines.

Institutional FX

Tradeweb’s trading volumes hit $1.20 trillion per day in September

Tradeweb Markets, the online fixed-income trading platform, today reported its operational metrics for the month of September 2022, which has seen continued strong trading volumes so far. A frenzy that, at this pace, puts it on track to set a new record.

Crypto Insider

Cryptocurrency Spoofing: Why Should Investors Care About It?

Investors don’t just care about making more money. They care about their safety and security, too. This is observable in cryptocurrency, where consumers always protect their financial interests. People have developed this habit of fear of falling victim to possible scams and frauds.

Retail FX

FSCS closes London Capital & Finance (LCF) scandal after three years

The Financial Services Compensation Scheme (FSCS) has provided a final date for closing the scheme to compensate investors who lost money in the London Capital & Finance scandal, namely on 31 October 2022.

Institutional FX

Cboe reports highest ADV for FX volume in two years

Cboe’s institutional spot FX platform today announced its trading volume for the month ending September 2022, which marks its third-highest month ever.

Executive Moves

Investall hires ex-DriveWealth Steve Cortright as CEO

Investall is an AI-driven mobile trading platform for personal finance and investing that delivers AI-driven trading for thousands of equities and major cryptocurrencies.

Digital Assets

SIX integrates CryptoCompare’s cryptocurrency data feed

SIX will provide digital asset data to its clients via the same delivery channels as its leading reference, pricing, corporate actions, regulatory, tax and ESG data.

Digital Assets

CME Group to launch reference rates and indices on Avalanche (AVAX), Filecoin (FIL), and Tezos (XTZ)

Several leading crypto exchanges and trading platforms will provide pricing data for these new benchmarks, starting initially with Bitstamp, Coinbase, Gemini, itBit, Kraken, and LMAX Digital.

<