The fact that Matthew Connolly left his employment at Deutsche Bank in March 2008 is set to prove he was unable to further the alleged conspiracy.
Matthew Connolly, one of the former Deutsche Bank traders prosecuted in the United States over his alleged participation in a conspiracy to manipulate LIBOR, has sought to distance himself from the allegations.
On Monday, April 23, 2018, Connolly filed a Motion and a Memorandum in Support of the Motion to admit evidence of his withdrawal from the alleged conspiracy. The documents were filed with the New York Southern District Court where the case against Matthew Connolly and Gavin Campbell Black continues.
The documents, filed on Monday, state that Connolly left his employment at Deutsche Bank AG in March 2008, whereas the Indictment charges a conspiracy from “in or about 2004 through in or about 2011,”. According to the defense, “Connolly’s complete detachment from Deutsche Bank after his departure in 2008 is clear evidence of his disavowal of, and withdrawal from, the alleged conspiracy, and the jury should be allowed to make that determination”.
Connolly is now seeking permission to admit evidence of his departure from the Bank—including the end of his responsibilities as an employee and supervisor, or any role with respect to financial transactions at the Bank—and to establish his withdrawal from any alleged conspiracy.
Connolly’s effective withdrawal from the alleged conspiracy is crucial to the defense for two reasons:
if the Government fails to prove that the alleged conspiracy affected a financial institution, it will not be entitled to a 10-year statute of limitations period; and
if the jury find that Connolly withdrew from any conspiracy, and did not engage in any offense-conduct after 2008, the charges against him for such conduct would be untimely.
The Indictment alleges that the former Deutsche Bank traders schemed to manipulate LIBOR by making false and fraudulent submissions that were intended to increase the profits (or reduce the losses) owed to Deutsche Bank at the expense of the bank’s counterparties to the derivatives-based contracts. The Government has charged the defendants with use of the wires in connection with a scheme to defraud.
According to the Indictment, the defendants were part of a scheme, carried out between 2004 and 2011, to cause Deutsche Bank, their employer-one of the sixteen “Submitter” banks whose estimated borrowing costs were used by the British Bankers’ Association (BBA) to set LIBORs in USD – to submit “false and fraudulent USD LIBOR submissions” to BBA. The Indictment charges that the LIBOR submissions were “false and fraudulent” because they were not “unbiased and honest,” in that they took into account considerations other than the true cost for Deutsche Bank to borrow from other banks at some future date certain-most notably, the trading positions of the defendants and their co-conspirators.
In March this year, Judge Colleen McMahon of the New York Southern District Court said the United States Government should do more to convince her that Matthew Connolly and Gavin Campbell Black committed fraud.