Courtesy of Pam Martens.
Chief Judge Colleen McMahon of the U.S. District Court for the Southern District of New York
If you needed more proof that the United States is heading in the direction of a dystopian authoritarian state, it arrived last Thursday, May 2, when the Chief Judge for the U.S. District Court for the Southern District of New York wrote a decision finding that the U.S. Justice Department had outsourced a criminal investigation to the target of the investigation – Deutsche Bank – and Deutsche Bank’s outside law firm, Paul, Weiss, Rifkind, Wharton & Garrison. Making the matter all the more interesting, the Chief Judge who wrote the decision, Colleen McMahon, formerly worked for Paul Weiss for 19 years, rising to the rank of partner. She remains, according to this profile, close friends with a number of former and current Paul Weiss lawyers.
Judge McMahon’s takedown of the government’s cozy relationship with Deutsche Bank and Paul Weiss has to be causing a lot of buzz in the Big Apple. The U.S. District Court for the Southern District of New York is where most major Wall Street fraud cases end up and Paul Weiss is a big player in that arena, particularly as defense counsel for the serially charged Citigroup. (See our previous article: Meet the Lawyer Who Gets Citigroup Out of Fraud Charges.)
The case is U.S. v Connolly (16-cr-00370) and involves Libor-rigging charges against two former employees of Deutsche Bank. On October 17, 2018, the two were convicted following a month-long jury trial. Matthew Connolly, Deutsche Bank’s former Director of the Pool Trading Desk in New York, was convicted of one count of conspiracy and two counts of wire fraud. Gavin Campbell Black, a Director on Deutsche Bank’s Money Market and Derivatives Desk in London, was convicted of one count of conspiracy and one count of wire fraud.
Libor (London Interbank Offered Rate) is an interest rate benchmark against which trillions of dollars in loans, mortgages and derivatives are set around the globe. Multiple global banks have been charged for their involvement in rigging Libor or similar benchmarks.
In April 2015, Deutsche Bank was given a deferred prosecution agreement in the Libor matter by the Justice Department that resolved wire fraud and antitrust charges. One unit of the bank, Deutsche Bank Group Services of the U.K., pleaded guilty to one count of wire fraud. The bank paid a $775 million fine.
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