While criticizing “mass incarceration” in the US and a failure to punish financiers after the financial crisis, a US judge on Thursday sentenced two British ex-bankers to prison for their roles in manipulating the primary benchmark for global short-term interest rates.
US District Judge Jed Rakoff in Manhattan sentenced Anthony Allen to two years in prison and Anthony Conti to a year and a day. The former Dutch bank Rabobank Groep NV employees were convicted in November last year of conspiracy and other charges for their roles in manipulating the London interbank offered rate, known as LIBOR.
LIBOR is used by banks to borrow from each other and affects trillions of dollars in contracts around the world, including mortgages, bonds and consumer loans.
While announcing the sentences, Rakoff criticized the US government’s failure to prosecute individuals from large financial institutions in connection with the 2008 financial crisis.
Rakoff said he was “mystified” that prosecutors only went after institutions since punishing individuals has a deterrent effect on others in a profession where stepping over boundaries can be tempting if there is seemingly no penalty for doing so.
He said the US, breaking a tradition of going after individuals when widespread financial crimes occur, had decided after the most recent financial crisis that it was best “extracting money from corporate parents, usually at the cost to their innocent shareholders.”
Both Allen and Conti were convicted last year by a jury that spent weeks hearing evidence compiled in a US Department of Justice probe of what was described as a global fraud scheme.
The investigation into the manipulation of a composite of the interest rate used by London banks when they borrow money from one another also resulted in the conviction in London of Tom Hayes, a former bank executive in the UK.
He is serving an 11-year sentence, though Rakoff noted that he is unlikely to serve more than 5 years.
Conti, of Essex, England, was a senior banker who handled US dollars while Allen, of Hertsfordshire, England, was the global head of cash at Rabobank when prosecutors said the scheme was carried out from 2005 to 2011.
Before the sentencing was announced, Allen told the judge he wished he had rejected the requests by others to influence the interest rate.
He said he wished his “radar was more tuned in” and now feared for his two young daughters who are “no longer happy-go-luck bubbly girls.”
Conti asked the judge for compassion, saying he worried about the effect on his family.
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