Scapegoat or Guilty? Connolly's $150 Million Battle against Deutsche Bank

<p>The US District
Judge Jesse Furman has denied Deutsche Bank's motion to dismiss a $150 million
lawsuit filed by Matthew Connolly, a former trader at the financial giant. The
judge cited unresolved factual disputes as the reason for allowing the case to
proceed, despite Connolly's previous conviction for rigging the Libor
benchmark, which was later overturned.</p><p>The Legal Hurdles and
Implications of Deutsche Bank's Libor Case</p><p>Connolly,
who once led Deutsche Bank's pool trading desk, was initially convicted in 2018
for manipulating the London interbank offered rate (<a href="https://www.financemagnates.com/tag/libor/" target="_blank" rel="follow">Libor</a>). However, an appeals
court overturned the conviction in January 2022, citing insufficient evidence. </p><p>The case
involving Connolly's participation in Libor rate manipulation <a href="https://www.financemagnates.com/institutional-forex/brokerage/two-former-deutsche-bank-employees-indicted-on-libor-fraud-charges/" target="_blank" rel="follow">began in 2016</a>.
According to the charges, Connolly, along with Gavin Campbell Black, was
accused of one count of conspiracy to commit wire fraud and bank fraud, as well
as nine counts of wire fraud for their involvement in a scheme to manipulate
the USD Libor rate.</p><p>Connolly
claims that Deutsche Bank used him as a "perfect fall guy" to protect
its senior executives, severely damaging his reputation and life. </p><p>Libor Rigging Cost Banks
$9 Billion</p><p>Deutsche
Bank has been given until 14 November to formally address the claims in
Connolly's lawsuit. "We will vigorously defend ourselves against these
claims," the institution stated for Reuters. The bank had previously <a href="https://www.financemagnates.com/institutional-forex/regulation/deutsche-bank-takes-a-e1-5bn-charge-for-libor-litigation/" target="_blank" rel="follow">been
fined €1.5 billion in 2015</a> as part of a larger probe into <a href="https://www.financemagnates.com/terms/l/libor/">Libor</a> manipulation,
which <a href="https://www.financemagnates.com/institutional-forex/impact-of-libors-discontinuation-on-swap-rates/" target="_blank" rel="follow">led to about $9 billion in fines</a> worldwide for various banks.</p><p>Libor,
which was <a href="https://www.financemagnates.com/institutional-forex/fca-asks-financial-firms-to-drop-synthetic-libor-for-robust-alternative/" target="_blank" rel="follow">phased out in January 2022</a>, underpinned hundreds of trillions of
dollars in financial products, including credit cards and mortgages. The
manipulation of this key benchmark has had far-reaching implications, affecting
a wide range of financial products and services.</p><p>The Chance to Establish an
Important Precedent</p><p>Connolly's
case is not an isolated incident. Black, a London-based colleague who was also
convicted and later acquitted, is pursuing a $30 million lawsuit against
Deutsche Bank. Both cases are part of a broader narrative of individuals
claiming to have been unfairly targeted by financial institutions in legal
actions related to Libor manipulation.</p><p>Therefore,
the outcomes of these lawsuits could set important precedents for future cases
involving financial institutions and their employees. For example, if Connolly
and Black win their lawsuits, it could encourage more individuals to come
forward with similar claims.</p>

This article was written by Damian Chmiel at www.financemagnates.com.