Finance, Executive - LIBOR Bankers Get Prison Time
A US Federal Judge in New York City sentenced two foremr bankers to prison after the two were convicted in the first US trial arising from global investigations into the manipulation of the London interbank offered rate, known as LIBOR.
The leading benchmark for pricing financial transactions, LIBOR is used by banks to borrow from each other. It impacts and influences Trillions of Dollars in deals the world over - from the biggest contracts drawn up in corporate boardrooms to individuals' mortgages, bonds, and consumer loans.
44-year old Anthony Allen was the Dutch multinational Rabobank's former global head of liquidity and finance; he got two years in prison. 46-year old former trader Anthony Conti got a one-year sentence. Both men are British citizens; both remain free while they appeal their convictions.
"The offense is too serious," U.S. District Judge Jed Rakoff in Manhattan in his Manhattan court. "You can't go around, as in my view Mr. Allen and Mr Conti did, helping rig one of the most important markets in the world and not pay the price."
The scheme to rig the LIBOR to influence the US Dollar and Japanese Yen lasted from 2006 to 2011. Rabobank paid US$1 Billion to resolve US and European investigation. Other financial institutions paid another US$8 Billion in fines and settlements. The only other person to be sentenced in the LIBOR scandal is Tom Hayes, a former UBS AG and Citigroup trader. He's serving an 11-year sentence after being convicted in a London trial in August. Six other bankers were acquitted.
US officials say more charges against others may be forthcoming.