In New York City, the first criminal trial in the US involving traders accused of rigging the London interbank offered rate is underway. Anthony Conti and Anthony Allen, both former Rabobank traders, are accused of conspiring to turn in fraudulent rate reports for Libor to help others make money off the trades.<\/p>\n
According to prosecutor Carol Sipperly, from \u201906 to \u201911 the two men gave Rabobank and themselves \u201cunfair advantage\u201d with their actions. Sipperly cited messages, emails, and testimony from three other ex-Rabobank traders who pleaded guilty to similar criminal charges.<\/p>\n
Defense attorneys for Allen and Conti contended that the rate submissions were presented in good faith and that it was the traders who already pleaded guilty who had engaged in wrongdoing. Allen\u2019s lawyer argued that his client never got compensation for the profits made by the other traders.<\/p>\n
Libor rates are established daily in London based on submissions made by 16 banks. The four lowest and highest rates are eliminated with the remaining eight averaged. The benchmark that results represents the rates that banks can borrow from each other for specific periods. However, numerous banks, including Barclays (BARC), JPMorgan Chase (JPM) Rabobank, and Citigroup (c) have had to pay billions of dollars to regulators to settle charges of Libor rigging.<\/p>\n