The Federal District Court in Lower Manhattan has begun the trial of two bankers accused of cheating to give themselves and their bank an unfair advantage in a Libor-rigging scheme that ran from 2006 to 2011. Anthony Allen and Anthony Conti, both Britons, were traders at the Dutch Bank Rabobank’s London office when they allegedly conspired to submit fraudulent rate reports to the British Bankers Association in an attempt to influence Libor rates.
Reports in the New York Times claim that several banks, including Citibank, JPMorgan 
Chase and Barclays have agreed to pay in excess of $10 billion to regulators globally to settle charges of Libor-rigging. In the current trial in New York, the judge, Jed S. Rakoff, has disallowed prosecutors from referring to the $1 billion paid by Rabobank as a settlement in a Libor-related case.
Earlier this year, Tom Hayes, a former UBS and Citigroup trader, was convicted by a London court of conspiring with others to influence Libor rates. He has been sentenced to 14 years in prison but has appealed against the judgement. Six former brokers accused of helping Tom Hayes are currently standing trial in London.
Libor is set on the basis of rates submitted by a group of banks for 10 currencies covering 15 different lengths of loan, ranging from overnight to 12 months.
The most important rate is the three-month dollar Libor. In the on-going trial in New York, Anthony Allen’s lawyer mocked the prosecution’s expert witness, Lawrence E. Harris, former chief economist at the Securities and Exchange Commission, for his answer to a question that suggested that Libor submission procedures weren’t well understood even by bank traders and experts.
Roy Futterman, a jury consultant, holds the view that it will be difficult for the prosecution to get a conviction because of the complexity and subjectivity of Libor submission procedures.
After the Libor-rigging scandal, the British government commissioned a major review of Libor procedures. Oversight of Libor is now with the Intercontinental Exchange, rates are based on actual transactions and there are specific criminal charges for manipulation of rates.
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