July 4, 2019 / 2:18 PM / a year ago

Former Deutsche Bank manager acquitted in London Euribor rigging trial

LONDON (Reuters) - A former Deutsche Bank (DBKGn.DE) managing director, who was extradited from Italy to face criminal charges that he helped to manipulate global Euribor interest rates, has been cleared by a London jury.

Andreas Hauschild, a 54-year-old German who ran Deutsche Bank’s Frankfurt team responsible for rate submissions, was promptly and unanimously acquitted by a jury at Southwark Crown Court.

The seventh benchmark manipulation case brought by the UK Serious Fraud Office (SFO) brings to a close a string of prosecutions drawn from a seven-year criminal investigation into allegations that bankers rigged two key interest rate benchmarks, Libor and Euribor, for profit.

Prosecutors alleged Hauschild had conspired to defraud by dishonestly manipulating Euribor (the euro interbank offered rate) - a benchmark for rates on an estimated $150 trillion (£119 trillion) to $180 trillion of financial contracts and loans worldwide - between January 2005 and December 2009.

But the former senior banker requested records of his trading books and took the jury painstakingly through data that cast doubt on the prosecution case, his lawyer said.

“I have always maintained my innocence of the charge against me and I am very pleased that today’s decision has vindicated my position,” Hauschild said in a statement. He said the last years had been difficult and requested privacy as he rebuilt his life and resumed his career.

The Euribor investigation has proved difficult for the SFO. Of the 11 individuals the agency originally wanted to charge, only seven have so far faced trial.

The acquittal of Hauschild, the first banker to be extradited to Britain over alleged Euribor rate-rigging, brings to three the number of former bankers who have been cleared.

Four have been convicted, including former Deutsche Bank star trader Christian Bittar and ex Barclays (BARC.L) trader Phillipe Moryoussef - although the Moroccan-born former trader was tried in absentia and remains in France.

A lawyer for Moryoussef said on Monday that his client had been a victim of an unfair process and had challenged Britain in the European Court of Human Rights.

The SFO was granted European Arrest Warrants for Hauschild, three other Germans and one Frenchman in 2016 after they did not attend court to be formally charged over manipulating Euribor.

Germany and France refused to extradite the men. Hauschild was only brought to Britain after he triggered the arrest warrant by travelling to Italy.

Euribor, like its Libor (London interbank offered rate) counterpart, is designed to reflect the cost of borrowing between banks and is set after submitters at a panel of major banks report their estimated costs of borrowing over various periods to an administrator, who calculates an average.

The latest trial draws a line under a series of SFO prosecutions that began with a case against former UBS (UBSG.S) and Citigroup (C.N) star trader Tom Hayes, who was sentenced to 14 years in jail in 2015 over Libor rigging before his sentence was cut to 11 years on appeal.

Hayes continues to fight his conviction.

Reporting by Kirstin Ridley, editing by Sinead Cruise and Jane Merriman

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