Two former Deutsche Bank traders accused of manipulating the London InterBank Offered Rate (“LIBOR”) were indicted by the Department of Justice (“DOJ”) on June 2, 2016. Dubbed “the world’s most important number,” LIBOR is a benchmark for global short-term interest rates that underpins trillions of dollars in mortgages and other debt. The case against the two indicted individuals, Matthew Connolly and Gavin Campbell Black, occurs more than a year after Deutsche Bank resolved its role in the LIBOR scheme by agreeing to pay $2.5 billion in regulatory and criminal penalties, and signals increased DOJ vigilance in the years-long probe into the manipulation of benchmark rates.

Since the onset of the LIBOR investigation—which was started by the U.S. Commodity Futures Trading Commission (“CFTC”) eight years ago—the DOJ has charged 15 individuals linked to the case, two of whom were convicted at trial while four pleaded guilty. After the most recent indictment, Assistant Attorney General Leslie R. Caldwell of the DOJ’s Criminal Division cautioned that “manipulation of . . . [LIBOR] undermines the integrity of our financial system and the Justice Department will continue to hold accountable both the financial institutions and the individuals responsible for this conduct.”

The CFTC’s Enforcement Director Aitan Goelman expressed similar views just a day earlier, when the CFTC announced Citibank’s agreement to pay a combined $425 million to resolve claims of manipulating and attempting to rig three benchmark rates. “We will vigorously continue to investigate any efforts to manipulate financial benchmarks,” Goelman warned. These prosecutions are part of an ongoing effort by an interagency Financial Fraud Enforcement Task Force—established by President Barack Obama in November 2009—that aims “to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.”

The recent developments seem to be consistent with the goal of the Task Force, and if they are any indication of what is to come, we are likely to see more individuals indicted for benchmark manipulation-related conduct in the future.

*Joon Hwan Kim is a summer associate with the firm. He is not an attorney.

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