Ex-Rabobank traders seek reversal in U.S. of Libor convictions

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By Nate Raymond | NEW YORK

NEW YORK A U.S. appeals court on Thursday
questioned whether two former Rabobank traders’ rights
were violated in what became the first case by U.S. Justice
Department to go to trial spilling out of global probes into the
manipulation of Libor.

Over 1-1/2 hours, the 2nd U.S. Circuit Court of Appeals in
New York weighed whether to overturn the 2015 convictions of
Anthony Allen and Anthony Conti, two former British traders at
the Dutch bank.

The traders argued their case became tainted after Paul
Robson, an ex-Rabobank trader turned cooperating witness,
reviewed testimony that a UK regulator compelled Allen and Conti
to give in a related probe.

Michael Schachter, Allen’s lawyer, said that may have
influenced any information Robson provided U.S. authorities or
at trial, causing their statements to be used against them in
violation of the U.S. Constitution.

U.S. Circuit Judge Gerard Lynch asked how the court could be
sure that did not happen, since no record existed of what Robson
would have said about any wrongdoing.

“He may have actually seen it, but we have a record where he
did not actually testify to it until after he had been exposed
to the immunized testimony,” Lynch said.

John Pellettieri, a Justice Department lawyer, said
prosecutors took steps to ensure the case did not become
tainted. But he said such caution was unnecessary since a
foreign government obtained the testimony.

Circuit Judge Jose Cabranes said under that theory, “if a
foreign sovereign beats the hell out of somebody and compels the
testimony, since it’s a different sovereign, you’re able to use
that compelled testimony in a federal court.”

Libor, or the London interbank offered rate, underpins
trillions of dollars of financial products and is based on what
banks say they believe they would pay if they borrowed from
other banks.

Probes into whether banks manipulated Libor have led to
roughly $9 billion in global settlements with financial
institutions and U.S. and UK cases against several people.

Allen, Rabobank’s former global head of liquidity and
finance, and Conti, a former senior trader, were indicted a year
after Rabobank in 2013 reached a $1 billion deal to resolve U.S.
and European probes.

A jury convicted them on conspiracy and wire fraud charges
in 2015 for participating in a scheme to rig the U.S. dollar and
yen Libor rates. Allen, 45, and Conti, 47, were sentenced to two
years and one year in prison, respectively.

The case is U.S. v. Allen et al, 2nd U.S. Circuit Court of
Appeals, No. 16-898.

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