Exonerated Deutsche Bank trader can pursue $150 mln lawsuit -US judge
BankingNov 2, 2023
A former Deutsche Bank trader whose conviction in New York for rigging a key interest rate benchmark was overturned can pursue a $150 million lawsuit accusing the German lender of malicious prosecution for making him a scapegoat.
U.S. District Judge Jesse Furman in Manhattan said on Tuesday he had "little trouble" denying Deutsche Bank's motion to dismiss Matthew Connolly's lawsuit, citing factual disputes that could not yet be resolved.
The judge said Connolly had "some large hurdles to jump," including the fact he had been convicted for rigging the Libor benchmark, but his accusations were sufficient to survive Deutsche Bank's motion.
Deutsche Bank has until Nov. 14 to formally address claims in Connolly's lawsuit. "We will vigorously defend ourselves against these claims," the bank said in a statement.
A lawyer for Connolly had no immediate comment.
Connolly, who once led Deutsche Bank's pool trading desk, and London-based colleague Gavin Black were convicted in 2018 for rigging Libor, with Connolly sentenced to six months of home confinement and a $100,000 fine.
A U.S. appeals court overturned both convictions in January 2022, citing a lack of evidence the defendants were guilty.
Connolly, a married father of two, said Deutsche Bank saw him as the "perfect fall guy" in its effort to shield senior executives responsible for Libor manipulation. He said its conduct destroyed his reputation and life.
Short for London interbank offered rate, Libor underpinned hundreds of trillions of dollars of financial products, including credit cards, mortgages and other loans, before being phased out in January 2022.
Libor probes led to about $9 billion of fines worldwide for banks, including $2.5 billion for Deutsche Bank in 2015.
Black is also suing Deutsche Bank for malicious prosecution, seeking $30 million in a lawsuit filed in a New York state court in Manhattan. The bank is seeking a dismissal.
Connolly's case is Connolly v. Deutsche Bank AG, U.S. District Court, Southern District of New York, No. 22-09811. Black's case is Black v Deutsche Bank AG et al, New York State Supreme Court, New York County, No. 150762/2023.