Mon, Oct 26, 2015 - Page 15 News List

Ex-trader sought by US arrested in Perth, Australia

Bloomberg

A former Rabobank Groep trader charged by US authorities with taking part in a scheme to manipulate benchmark interest rates was arrested this week in Australia, according to the Australia Attorney-General’s Department.

Paul Thompson, who is among seven Rabobank traders indicted in New York, was taken into custody in Perth on Thursday by authorities, according to an e-mailed statement issued on Saturday. The US sought Thompson’s extradition to face prosecution for wire and bank fraud, according to the statement.

Thompson was the Dutch bank’s head of money market and derivatives trading for Northeast Asia, according to a US Justice Department statement. He was indicted by a federal grand jury for allegedly conspiring to manipulate the London interbank offered rate (LIBOR). Two former Rabobank traders — Anthony Allen and Anthony Conti — are currently on trial in Manhattan.

The charges against the traders stem from a global investigation into the manipulation of LIBOR by banks, a probe that has spawned investigations into other markets, such as currencies and precious metals.

In the US, the Justice Department has won about US$2 billion in criminal penalties from banks including Barclays PLC and UBS Group AG. Rabobank agreed to pay more than US$1 billion in 2013 to resolve regulators’ claims, including a US$325 million penalty from the Justice Department.

The trial of Allen and Conti is the first in the US against individuals for allegedly conspiring to manipulate LIBOR, a benchmark rate tied to more than US$350 trillion of loans and securities.

The two traders, who waived extradition and agreed to travel to the US to contest the charges, could be sentenced to more than a decade in prison if convicted. Three other ex-Rabobank traders have pleaded guilty.

Michael Schachter, Allen’s lawyer, told US District Judge Jed Rakoff that after prosecutors rest, the defense would call expert witnesses and that they intended to call Allen.

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