August 14, 2015 / 9:45 PM / 4 years ago

Ex-Rabobank trader called 'potential target' in US probe of Libor

NEW YORK, Aug 14 (Reuters) - U.S. prosecutors on Friday identified a British former trader at Rabobank as a potential target of a broad investigation into Libor benchmark manipulation that has already resulted in charges against seven of the bank’s employees.

The identity of Damon Robbins, the ex-Rabobank employee, was confirmed by a U.S. Justice Department prosecutor and others during a court hearing in New York on Friday in a criminal case against two of the trader’s former colleagues.

The prosecutor, Michael Koening, called Robbins an unindicted co-conspirator of the two former Rabobank traders, Anthony Allen and Anthony Conti, who are scheduled to face trial on Oct. 5.

It is unclear if Robbins will ever face charges. Koenig said the Justice Department has “not made a determination” on whether to indict Robbins.

But Koening said three witnesses confirmed Robbins was involved in the scheme. In court papers, prosecutors referred to Robbins only as “Submitter-R1” and called him a “potential target.”

John Hillebrecht, Robbins’ lawyer, did not respond to requests for comment.

Libor, or the London interbank offered rate, is a short-term rate that underpins hundreds of trillions of dollars of financial products.

U.S. and European authorities have been probing whether banks attempted to manipulate the rate to benefit their own trading positions.

The investigations have resulted in $9 billion in settlements with banks and brokerages and several people being charged.

Rabobank agreed in 2013 to pay $1 billion to resolve U.S. and European Libor-related probes, including $325 million as part of a deferred prosecution agreement with the Justice Department.

Conti and Allen, both British citizens, were indicted in October. They have pleaded not guilty to charges that they participated in a scheme to manipulate U.S. dollar and yen Libor rates.

Three other employees have pleaded guilty, while two others have not appeared in U.S. court.

Records show that Robbins, also a British citizen, left Rabobank in 2008 after working on the same trading desk as Allen and Conti.

Defense lawyers contend that prosecutors included Robbins in the indictment so he would exercise his Fifth Amendment right against self-incrimination and refrain from testifying in favor of Allen and Conti.

“There was no purpose other than to send a message to him and his counsel to that he better not take the witness stand,” said Allen’s lawyer, Michael Schachter.

Koening denied that assertion. Defense lawyers asked U.S. District Judge Jed Rakoff to force prosecutors to grant immunity to Robbins, but he rejected their request.

The case is U.S. v. Robson, U.S. District Court, Southern District of New York, No. 14-cr-00272. (Editing by Jonathan Oatis)

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