US govt not to take evidence from ex-British Bankers’ Association employee in LIBOR-rigging case
The US Government changes its mind again as to whether to depose former BBA employee Sally Scutt.
The United States government has once again changed its mind as to whether to interview employees of the British Bankers’ Association (BBA) as a part of the criminal case targeting two former Deutsche Bank traders – Matthew Connolly and Gavin Campbell Black.
In April this year, the Department of Justice asked the Court to allow taking depositions from:
- Sally Scutt, a former deputy chief executive of the British Bankers Association (BBA);
- one or more current BBA employees to authenticate and establish BBA documents as business records.
Now, however, the government has taken the opposite stance. On May 29, 2018, the DOJ informed the New York Southern District Court that it will not take a Rule 15 deposition of former British Bankers’ Association (BBA) employee Sally Scutt.
As set forth in the government’s motions in limine, the government still intends to prove that the defendants made two types of false statements to Deutsche Bank’s counterparties: (1) false statements when entering into swap transactions; and (2) biased and dishonest LIBOR submissions that went through the BBA and Thomson Reuters, acting as conduits.
More specifically, the government intends to offer evidence of how the BBA defined LIBOR and how the defendants allegedly caused the submission of biased and dishonest rates that were inconsistent with that definition. The government also plans to offer evidence that, in phone calls and in-person meetings, members of the conspiracy made false and misleading statements to representatives of the BBA to prove the existence of a scheme and conspiracy, but not to establish the state of mind of anyone at the BBA.
The defendants in the case – Matthew Connolly and Gavin Campbell Black, have opposed the government’s previously announced plans to obtain the testimony of certain individuals from the British Bankers Association (BBA). Ms Scutt was a part-time BBA employee who was not involved with LIBOR until 2009, they note. During the Claim Period (defined as August 2007 to at least the end of 2009), Ms Scutt was only contracted to work two and a half days a week for the BBA. That is, the evidence the Government seeks was seen as unreliable.
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 a recently filed motion, the Government contends that the defendants made, not one, but two different types of false and misleading statements or representations in furtherance of their conspiracy to obtain money and property from their counterparties by manipulating LIBOR. Neither consists of a false and fraudulent submission made to the BBA (via Thomson Reuters). Rather, the Government now relies on statements allegedly made (or omitted to be made) directly to the victims of the fraudulent scheme – the counterparties to Deutsche Bank’s trades. To be specific, the Government argues that “For both categories of false and misleading representations, the defendants and their co-conspirators intended to mislead the counterparties by the statements transmitted to them”.
The case is captioned USA v. Connolly (1:16-cr-00370).
