Ex-Deutsche Bank traders seek help from experts in LIBOR manipulation case

Matthew Connolly and Gavin Campbell Black, former derivative product traders at Deutsche Bank, who stand accused of LIBOR rigging, are now seeking to beef up their defenses by giving notice of their intentions to use the testimony of several experts. On Friday, August 17^th, the relevant documents were filed with the New York Southern District Court.

In the documents, seen by FinanceFeeds, Gavin Campbell Black announces his intention to present the expert testimony of Christopher Rooke, whom Mr Black may offer as an expert in money markets and derivatives trading.

Mr Black anticipates that Mr Rooke will testify that a reasonable market participant would be aware that there was no requirement that a bank, including a Panel Bank, impose a communication barrier between its employees involved in cash trading, derivatives trading and the submission of LIBOR. Also, Mr Rooke is anticipated to provide testimony that the derivatives traders at a Panel Bank were not prohibited from sharing their market views, including their derivatives trading positions, with their bank’s LIBOR submitter.

Mr Rooke is also expected to say that as a result of BBA’s LIBOR submission process, LIBOR reflected a collection of subjective perceptions of borrowing rates, and that a Panel Bank submitter had the discretion to submit LIBOR within a reasonable range.

Gavin Campbell Black plans to present the testimony of another expert – Dr Jonathan Arnold.

Mr Black anticipates that Dr Arnold may provide testimony that Deutsche Bank’s USD LIBOR submissions, as identified by the Government in the Indictment, are economically reasonable. Dr Arnold considered multiple factors in reaching this conclusion, such as: Deutsche Bank’s activity in the interbank lending market; trends in USD LIBOR submissions; and relevant market conditions, events and indicators.

Matthew Connolly has given notice of his intention to present the expert testimony of Matthew A. Evans, whom Mr Connolly offers as an expert in the field of trading data analysis, global financial derivatives markets, trading practices, risk management practices and hedging techniques. Mr. Evans is presently a Managing Director at AlixPartners, LLP.

Mr Evans is anticipated to explain that Deutsche Bank’s submissions on Relevant Dates were supported by factors that demonstrated the reasonability of each submission on each date. He is also expected to explain that the change in Deutsche Bank’s submissions on Relevant Dates (the dates in the indictment) is not generally out of line with the movements of other Panel banks.

The case, captioned USA v. Connolly (1:16-cr-00370), continues at the New York Southern District Court.