Second Circuit Overturns Convictions of Two Former Rabobank Employees Prosecuted for LIBOR Manipulation: In the First Appellate Decision Nationwide Arising Out of the LIBOR Criminal Investigation, the Second Circuit Holds the Fifth Amendment Prohibits the Use in U.S. Criminal Proceedings of Testimony Compelled by Non-U.S. Governments

Sullivan & Cromwell LLP - July 21, 2017

On July 19, 2017, in United States v. Allen, the U.S. Court of Appeals for the Second Circuit reversed the fraud convictions of two defendants relating to their attempts to manipulate the London Interbank Offered Rate (LIBOR).  Investigating authorities in the United Kingdom previously had compelled the defendants—Anthony Allen and Anthony Conti—to testify about their role in manipulating LIBOR and disclosed their compelled testimony to a third person under investigation—Paul Robson—who later testified against Allen and Conti at their trial.  On appeal, the Second Circuit held that, in U.S. criminal proceedings, the Fifth Amendment prohibits prosecutors from using, even derivatively, testimony compelled by non-U.S. governments.  Because the Second Circuit panel found that the government failed to prove that the compelled testimony did not affect Robson’s testimony against Allen and Conti, the panel unanimously reversed their convictions and dismissed the indictment against them.