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US jury convicts 2 ex-Rabobank traders of Libor fraud

Anthony Allen, a former London-based Rabobank Groep trader, arrives at federal court in New York, US on Tuesday, on Oct. 13, 2015.

[NEW YORK] A New York jury convicted on Thursday a pair of former Rabobank traders of fraud in connection with a scheme by large banks to manipulate the Libor benchmark interest rate.

Anthony Allen and Anthony Conti, who worked for the Dutch bank in London, were found guilty in a US federal court of helping a scheme in which Rabobank submitted false data for the setting of Libor, a widely used rate that underpins some US$500 trillion of contracts globally.

After a four-week trial, Allen and Conti were convicted of conspiracy to commit wire and bank fraud and committing wire fraud. That marked the first convictions in the United States for the globe-spanning Libor rigging scheme.

Their convictions came on the heels of an August conviction in Britain of Tom Hayes, a former Tokyo-based trader at UBS and Citigroup who was sentenced to 14 years in prison for Libor rigging.

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Allen and Conti worked in concert with Rabobank traders to manipulate the Libor rate for the dollar and the yen in ways that benefited the Dutch bank's trading positions, prosecutors argued.

Their convictions are expected to be challenged on the grounds that some testimony given by the two men should be thrown out.

If the convictions are upheld, the two men are expected to be sentenced in March 2016. They face up to 10 years in prison.

"These convictions make clear that bank executives and traders will be held accountable for manipulating world interest rates for their own personal benefit," said Paul Abbate, assistant director in charge of the Federal Bureau of Investigation's Washington field office.

In October 2013, regulators from Britain, France and the Netherlands fined Rabobank, the second-largest Dutch bank, 774 million euros (S$1.18 billion) for its role in conspiring with other large banks to manipulate Libor.