2 British ex-bankers convicted of all charges in US trial over LIBOR interest rate scandal

NEW YORK, N.Y. – Two British ex-bankers were convicted Thursday of conspiring to manipulate a key interest rate to earn money for their bank and colleagues who traded securities affected by interest rates.

Anthony Allen, 44, shook his head and dropped his head onto a table in Manhattan federal court as guilty verdicts were announced on conspiracy to conduct wire fraud and bank fraud and 18 other charges carrying potential penalties of decades in prison.

His co-defendant, Anthony Conti, 46, was convicted of conspiracy to commit wire fraud and bank fraud and eight other charges stemming from a Justice Department probe of what Assistant Attorney General Leslie R. Caldwell described as a “global fraud scheme.” He also could face decades in prison, though they are both likely to face far less.

Caldwell noted in a statement that the investigation into the manipulation of a composite of the interest rate used by London banks when they borrow money from one another also resulted in the recent conviction by a jury in London of Tom Hayes, a former bank executive in the United Kingdom. He was sentenced in August to 14 years in prison.

“This is round one,” said Michael Schachter, Allen’s lawyer. Tor Ekeland, an attorney for Conti, said they would pursue all legal options.

Conti was a senior banker who handled U.S. dollars while Allen was the global head of cash at the Dutch bank Rabobank when prosecutors said the scheme was carried out from 2005 to 2011.

The London interbank offered rate, known as LIBOR, is used by banks to borrow from each other and affects trillions of dollars in contracts around the world, including mortgages, bonds and consumer loans.

Regulators in Britain, Switzerland, the U.S. and Asia have been investigating the banks’ conduct for months, and negotiating settlements with banks.

Netherlands-based Rabobank agreed two years ago to pay about $1 billion to settle U.S., British and Dutch charges of manipulating the key global interest rate. The payout included a $325 million deal with the U.S. Justice Department to allow the bank to avoid criminal prosecution in exchange for co-operation.

U.S. District Judge Jed Rakoff rejected a request that bail be revoked.

“I’m not particularly worried Mr. Conti or Mr. Allen will flee,” he said.

Hinting at a measure of leniency likely at sentencing, Rakoff said the men probably would have faced more prison time if they had been prosecuted in London.

He said they would be foolish to flee, making them “pariahs for life.”

Outside court, juror Howard Wasserfall noted that Allen’s nicknames at the bank included “Ghostie” and “Casper,” signifying that as a manager he “always knew he’d be a figure in the background” as co-workers pleaded for them to manipulate interest rates to benefit their trades.

Wasserfall said it was significant there was no evidence Allen ever told anyone: “Hey, maybe we’re putting too much stock in what the traders are saying.”