Deutsche Bank is being sued for $150 million in New York by traders who were acquitted of concealment charges | Techy Kings


NEW YORK, Nov 18 (Reuters) – Deutsche Bank AG has been sued for $150 million by a former trader whose conviction for rigging the Libor rate benchmark was overturned, and who said the bank framed it to shield top executives from blame.

In a complaint filed Thursday in New York, Matthew Connolly accused the bank of “malicious prosecution” for making materially false statements to the US Department of Justice, and ordering an employee to perjury at trial.

Connolly said the German lender saw him as the “perfect fall guy” even though he had “hardly anything to do” with Libor, to protect the executives who ordered its Libor manipulation.

Deutsche Bank’s scapegoating damaged the reputation and career of Connolly, a married father of two, and caused “the destruction of his life,” the complaint said.

The bank said in a statement: “We will vigorously defend ourselves against these claims.”

Libor is an abbreviation of the London interbank offer rate.

Before it was phased out in January, it backed hundreds of trillions of dollars in financial products including credit cards, mortgages and other loans.

Worldwide investigations into Libor manipulation have resulted in about $9 billion in fines for banks, including $2.5 billion for Deutsche Bank in 2015.

Connolly had headed Deutsche Bank’s pool trading desk in New York before leaving in 2008.

He and London-based colleague Gavin Black were charged in 2016 and convicted in 2018 of rigging Libor, with Connolly sentenced to six months’ house arrest and a $100,000 fine.

A US appeals court overturned their convictions in January, however, citing a lack of evidence that they were guilty.

Connolly sued Deutsche Bank four weeks after a New York judge tossed Libor rigging charges against former UBS ( UBSG.S ) and Citigroup ( CN ) trader Tom Hayes and another trader.

Prosecutors said the overturning of Connolly’s and Black’s convictions affected those cases. Hayes has already served more than five years in prison in Britain for rigging Libor.

Citigroup faces a separate $112 million lawsuit in New York in which former trader Rohan Ramchandani accuses him of being the scapegoat in a US criminal investigation into foreign exchange fraud.

The case was Connolly v. Deutsche Bank AG, US District Court, Southern District of New York, No. 22-09811.

Reporting by Jonathan Stempel in New York Editing by Matthew Lewis

Our Standards: Thomson Reuters Trust Principles.


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