Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Fourth former Rabobank trader pleads guilty in LIBOR manipulation investigation, (Jul 7, 2016)

By Jeffrey May, J.D.

The Department of Justice has secured a fourth guilty plea from a former Coöperatieve Centrale Raiffeisen-Boerenleebank B.A. (Rabobank) derivatives trader in connection with the government's multi-year investigation into in a scheme to manipulate the London InterBank Offered Rate (LIBOR). Today, Paul Thompson, of Australia, pleaded guilty to conspiracy to commit wire fraud and bank fraud in the federal district court in New York City, the Justice Department announced (U.S. v. Thompson, Criminal No. 1:14-cr-00272-JSR).

In 2014, a 15-count indictment naming Thompson, as well as Paul Robson of the United Kingdom and Tetsuya Motomura of Japan, was filed in the federal district court in New York City. The individuals—all former Rabobank employees—were charged with conspiring to manipulate the LIBOR interest rate to the bank’s advantage. According to the indictment, the defendants, who traded derivative products whose value was tied to the Yen LIBOR, allegedly engaged in wire fraud, as well as a conspiracy to commit wire fraud and bank fraud.

The charges against the three individuals followed Rabobank's admission to the bank's involvement in the manipulation of LIBOR. LIBOR is an average interest rate, calculated based on submissions from leading banks around the world, reflecting the rates those banks believe they would be charged if borrowing from other banks. The published LIBOR "fix" for Yen LIBOR at a specific maturity is the result of a calculation based upon submissions from a panel of banks, including Rabobank. Rabobank entered into a deferred prosecution agreement with the Justice Department in 2013 and agreed to pay a $325 million penalty.

With respect to the other two individuals named in the 2014 indictment, Robson has pleaded guilty to one count of conspiracy in connection with his role in the scheme. Motomura is awaiting trial. Two other former Rabobank traders—Lee Stewart and Takayuki Yagami—also have pleaded guilty.

Convictions. The Justice Department also has successfully prosecuted two former Rabobank employees. At trial in 2015, Anthony Allen—the bank’s former global head of liquidity and finance in London—was found guilty of one count of conspiracy to commit wire fraud and bank fraud and 18 counts of wire fraud. Anthony Conti—a former senior trader on the bank’s money markets desk in London—was found guilty of one count of conspiracy to commit wire fraud and bank fraud and eight counts of wire fraud. Allen was sentenced to 24 months in prison, and Conti was sentenced to 12 months and one day in prison.

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