Libor Ruling Raises New Concerns for Deutsche Bank Trader Case

A U.S. judge said defense lawyers have a new opportunity to challenge charges against two former Deutsche Bank AG traders accused of rigging Libor after last week’s appeals court ruling tossing out a similar case against ex-Rabobank Groep traders.
‘The implications for this case are huge,’ U.S. District Judge Colleen McMahon said at a hearing Tuesday in Manhattan. ‘It’s like uncharted waters. It’s like we’ve sailed off the edge of the map.’
Lawyers for Matthew Connolly, a former Deutsche Bank supervisor in New York, and Gavin Black, an ex-London trader, have already asked McMahon to dismiss the case against them, citing the Rabobank decision. The ruling, which made it harder for prosecutors to prove cross-border crimes, was a central focus of Tuesday’s hearing, along with another legal issue. The judge has yet to rule on the dismissal request.
Last week, the New York-based federal appeals court overturned the convictions of former Rabobank traders Anthony Allen and Anthony Conti, saying their forced testimony before the U.K.’s Financial Conduct Authority tainted the government’s case against them, in violation of their rights under the U.S. Constitution against compelled self-incrimination. The government hasn’t said whether it will seek to appeal to the U.S. Supreme Court.
In the Deutsche Bank case, Connolly and Black are accused of defrauding investors by providing false Libor submissions to rig the benchmark rate underlying trillions of dollars of loans and other financial products. The case is set for trial in February.
The new question is whether Black’s compelled testimony affected the government’s investigation or the criminal charges filed against the two men. McMahon set a schedule for both sides to address the issue.
‘There are obvious and serious issues here, both with respect to the grand jury and with respect to trial witnesses,’ Seth Levine, a lawyer for Black, told the judge.
Alison Anderson, a trial attorney for the Justice Department, told McMahon the Deutsche Bank case is different from Rabobank and that the exposure to Black’s testimony was ‘potential, indirect, tangential.’
The case is U.S. v. Connolly, 16-cr-00370, U.S. District Court, Southern District of New York (Manhattan).