Ex-Deutsche Bank trader Connolly wants separate trial in LIBOR-rigging case

Maria Nikolova

Matthew Connolly moves the New York Southern District Court to enter an Order severing his trial from the trial of co-defendant Gavin Campbell Black.

Matthew Connolly and Gavin Campbell Black, former Deutsche Bank traders accused of LIBOR manipulation, may have separate trials, following a clash over jury instructions with the US Government.

The ex-traders who have already disagreed with the Department of Justice (DOJ) over expert testimony to be used at trial, now appear to be having new issues with the US authorities – this time over certain statements made by the US Government in a submission to the New York Southern District Court earlier this week concerning jury instructions.

On Friday, September 14th, Matthew Connolly filed a Motion to Sever, in which he moves the Court to enter an Order severing his trial from the trial of Gavin Campbell Black.

The motion is based on the Government’s submission from earlier this week. In it, for the first time, the US authorities raised an allegation of collusion with derivatives traders at other Panel banks regarding LIBOR submissions against Gavin Campbell Black.

The government filed its objections to Defendants’ proposed jury instruction no. 10, which would instruct the jury that there “is no allegation that the defendants colluded in any way with individuals at other banks.”. The Government argued that this instruction would be inaccurate because the government intends to present evidence that Black was communicating with a derivatives trader at Rabobank.

Connolly argues that the introduction of this allegation at trial would cause substantial prejudice to him, as he was not a participant in any of the alleged discussions that could give rise to this claim and he was not aware that allegations of collusion were part of the government’s case against his co-defendant. Because this is a serious allegation that has a significant likelihood of substantial prejudice, and is not part of the charges against Connolly, he argues that severance is appropriate.

Let’s recall that the Indictment alleges that Matthew Connolly and Gavin Campbell Black engaged in a scheme to cause Deutsche Bank AG to submit false and fraudulent USD LIBOR submissions to the British Bankers’ Association (BBA) for inclusion in the calculation of USD LIBOR. Connolly stresses that the Indictment does not allege any manipulation, collusion, or fraud related to the submission of LIBOR rates based on communications between the defendants and traders at any other bank.

Connolly requests that the Court grant his motion to sever. In the alternative, he requests that the Court would not permit the government to introduce or otherwise reference evidence against his co-defendant Black regarding alleged collusion with other financial institutions regarding LIBOR submissions.

Connolly notes that, the crime that the government indicted referred to communications between derivatives traders and LIBOR submitters within Deutsche Bank. The Indictment’s reference to communications between Black and a derivatives trader at Rabobank does not allege or hint at collusion in the submission of LIBOR rates between Deutsche Bank and other Panel banks. Nor are there any allegations in the Indictment that either of the Defendants engaged in a scheme to cause other Panel banks to submit false and fraudulent LIBOR submissions to the BBA.

Any attempt by the government to argue that its newly articulated collusion scheme is the same scheme described in the Indictment is simply incorrect, Connolly argues.

The case is captioned USA v. Connolly (1:16-cr-00370).

Read this next

Retail FX

Financial Commission adds FX broker Bold Prime to membership roster

The Financial Commission today announced that it has added Bold Prime to its member roster, which is made up of online brokerages operating in FX, derivatives and cryptocurrency markets.

Digital Assets

Despite crypto winter, Cake DeFi paid out $58 million in Q2 rewards

According to its latest ‘Transparency Report,’ Cake DeFi continued its growth trajectory in the three months through June 2022, even as the entire crypto industry experienced macro challenges this quarter.

Retail FX

SimpleFX Review: Cryptos, Spreads, Pros & Cons

SimpleFX combines years of Forex and cryptocurrency experience with a focus on offering resources to retail traders. 

Retail FX

Ironbeam becomes CME clearing member and launches MT5

“The direct clearing aspect along with our low-latency proprietary trading tools and technology solutions make Ironbeam the ideal trading destination.”

Institutional FX

Top 0.07%: oneZero makes it to Inc. 5000 of fastest growing companies in America

oneZero started out by serving the foreign exchange trading community, developing and executing technology that could scale with the growth of the FX market.

Industry News

CFTC wins case against broker for secretly taking other side of client orders in block trades

“As we said at the outset of this case, the illegal use of inside or confidential information undermines confidence in markets and will not be tolerated.”

Technology

BankiFi raises $4.8m to bring embedded banking platform to North America

“Our mission is to make all aspects of cash management and payments easier for SMBs everywhere, and this investment is another huge step to making that a reality.”

Executive Moves

Shieldpay hires ex-Payoneer Chris Andrews as Head of Sales

“We’ll be expanding our position in existing markets and accelerating growth into new verticals, whilst building on our direct and indirect channels.”

Digital Assets

Crypto.com secures preliminary approval to operate in Canada

Crypto.com, one of the longest-established crypto platforms, has become the first digital asset platform to sign a Pre-‘Registration Undertaking’ with the Ontario Securities Commission (OSC) in Canada.

<