A former Deutsche Bank trader cleared of charges that he rigged the Libor benchmark rate is suing for malicious prosecution, becoming the second employee cleared in court to pursue the bank for damages.
The trader, Gavin Black, and former colleague Matthew Connolly were convicted of wire fraud in 2018 for rigging Deutsche Bank's Libor submission. The federal appeals court in New York
Black sued in state court in Manhattan on Wednesday, filing a document that provided notice of his claims without a detailed complaint. He's seeking at least $30 million in damages for malicious prosecution and abuse of process, according to the court filing.
Matthew Connolly and Black were found guilty on Wednesday of trying to manipulate the London interbank offered rate, which is used to value trillions of dollars of financial products, from 2004 to 2011.
A Deutsche Bank spokesman, in an email Thursday, said the bank would "vigorously defend" itself against the claims.
In 2015, the bank agreed to pay $2.5 billion and fire seven traders, including Black, to resolve probes into its role in the Libor-fixing scandal. At trial, Black and Connolly argued they were being blamed for a practice that was common in the industry and encouraged by the bank's leaders.
After their convictions, U.S. District Judge Colleen McMahon declined to sentence Connolly and Black to prison terms, saying she couldn't make them "scapegoats for the entire industry" because they were "very minor participants."
The claims by Black and Connolly are similar to those of a Citigroup trader, who accused the bank of purposely mischaracterizing his comments in online chat groups to make him its scapegoat in a U.S. criminal probe of price fixing in the foreign exchange market.
Rohan Ramchandani, who was found not guilty after a trial in 2018, is seeking $112 million in damages from Citi. He claims the bank falsely implicated him in a criminal scheme to protect more senior officials and the bank itself. Citigroup has denied the allegations and is opposing Ramchandani's suit.
The case is Black v. Deutsche Bank, New York State Supreme Court (Manhattan).
— With assistance from Chris Dolmetsch.
