A former British trader has been convicted in the US of “fixing” interest rates, despite pleading guilty.
Mike Curtler, formerly of Deutsche Bank, was among 38 former traders and brokers prosecuted after the US Department of Justice ruled their conduct illegal 10 years ago.
But earlier this year, a US appeals court ruled that no rules were broken.
Mr Curtler’s lawyer said they were “extremely pleased” with the decision.
Over the past eight years, 38 former brokers and dealers have been prosecuted for emails and messages asking colleagues to adjust their estimates of the cost of borrowing to their bank’s commercial interests – a practice the US Department of Justice has described as rate “manipulation” declared illegal interest in 2012 when she fined Barclays Bank for doing so.
Estimates of the interest rates paid by banks were provided each morning as part of the process to determine Libor (London Interbank Offered Rate), the index that reflects the cost of borrowing.
Just as the FTSE tracks stock prices, the Libor tracks the interest rates banks pay to borrow cash in the wholesale money markets.
Over the past 35 years, it has been used to set interest rates on millions of home and commercial loans around the world.
To calculate Libor, 16 banks answer one question every day – what interest rate could they borrow money at? They submit their answers and an average is formed.
The evidence against Mike Curtler and other traders consisted of messages and emails asking to submit those interest rates as “high” or “low.”
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Mike Curtler admitted he complied with email requests and pleaded guilty, facing the risk of up to 15 years in a US prison if tried.
But in January this year, a US appeals court ruled that the applications were not illegal after all, acquitting former Deutsche Bank traders Gavin Black of Middlesex and Matt Connolly of New Jersey.
Now US courts are even acquitting those who have pleaded guilty, like Mike Curtler, saying they must be presumed innocent.
“I am very glad that the US courts ruled that what we did was not criminal. The last decade has been terrible but hopefully we can now start rebuilding,” Mr Curtler told the BBC.
Mr Curtler’s attorney, David Krakoff, said: “We are delighted that Mike Curtler has been acquitted and the courts have ruled that there was no wrongdoing.”
A month ago a New York court overturned the conviction of former trader Tim Parietti, 56, who also pleaded guilty, and ordered the government to pay back a £1million fine.
This makes the UK the only country in the world to have upheld convictions for interest rate ‘manipulation’.
Nine were convicted in the UK including Tom Hayes, Peter Johnson, Jonathan Mathew, Alex Pabon, Jay Merchant, Christian Bittar, Philippe Moryoussef, Carlo Palombo and Colin Bermingham.
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