Australian former Rabobank trader arrested over Libor rate-rigging scandal

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A Western Australian man is in jail awaiting extradition to the United States for his alleged role in the Libor interest rate-rigging scandal.

The extradition order relates to allegations, which first emerged in 2012, that traders had manipulated the Libor rate, a benchmark interest rate that some of the world’s leading banks charge each other for short-term loans, for their own benefit.

Paul Thompson was arrested on an extradition order by Australian federal police in Perth on Thursday and was taken to Hakea Remand Centre.

The 49-year-old, who lives with his family in the inner-city Perth suburb of Dalkeith, is wanted for prosecution in the US for charges of wire and bank fraud.

Thompson was charged alongside two other Rabobank employees in January 2014 with conspiracy to commit wire fraud and bank fraud and two counts of wire fraud.

According to a statement made by acting assistant US attorney general, Mythili Raman, at the time those charges were laid, the three men, “deliberately submitted what they called ‘obscenely high’ or ‘silly low’ Libor rates in order to benefit their own trading positions”.

A spokesman from the Australian attorney general’s office confirmed Thompson’s arrest on Monday but said it was inappropriate to comment further as the matter was now before court.

Australian-born Thompson is the former head of Dutch-owned Rabobank Groep’s money market and derivatives trading in south-east Asia and worked for the bank, based in Singapore, between 2006 and 2011.

He is one of seven Rabobank employees to be charged in connection to the Libor scandal, which spans across 18 financial institutions and 35 individuals. The charges all relate to allegations traders colluded to fix Libor interest rates. Under the system operating at the time, the Libor was supposed to be set based on an average of supposedly independent submissions made by a number of banks.

The trial of London-based former Rabobank employees Anthony Allen, the former global head of liquidity and finance, and Anthony Conti, a senior trader, began in New York this month. Both have denied the allegations.

According to the Wall Street Journal, three other Rabobank employees have pleaded guilty and one man is yet to enter a plea.

In 2013 the bank agreed to a US$1.07bn settlement to the US, British, Dutch and Japanese authorities.

Thompson’s wife Robyn told The Wall Street Journal that she didn’t believe her husband should be tried in the US.

“There is no reason for Paul to be charged by the US,” she said.

“For this reason we were hoping that Paul could defend himself against any allegations in either Australia or the UK, so he could have access to the necessary evidence, financial and emotional support to do this properly.”

But the family has not yet indicated it intends to fight the extradition order. In another statement made to the West Australian on Sunday, a person identified only as a spokesman for the family said they would be seeking to have Thompson bailed “as there is no need for him to be in prison while they are addressing the extradition process”.

“As a devoted and loving father Paul poses no risk to anyone in the community and he has not left Perth in the last couple of years, even though he has been aware of these charges since early 2014,” the spokesman said.

The spokesman said that Thompson had never worked in the US nor for a US-owned company and had no direct connections to America, and repeated their desire to have the case heard in either Australia or the UK.

Guardian Australia has sought comment from Thompson’s family.

Under Australia’s procedure for extradition requests, a person who is arrested subject to an extradition order can only be bailed in “special circumstances”.

Powered by article was written by Calla Wahlquist, for on Monday 26th October 2015 05.12 Europe/ © Guardian News and Media Limited 2010


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