One morning in February 2013, Matt Connolly noticed a parked sedan outside his house in New Jersey.
It was the FBI. Investigations into Libor fixing had begun.
Connolly became one of more than 20 traders found guilty of manipulating Libor, an interest rate that shows what rate banks will lend to each other, the lower the rate, the more stable the banks.
Last week, a US appeals court overturned his conviction and that of Gavin Black, a fellow Deutsche Bank trader in the UK.
That gave hope to other traders, including perhaps Tom Hayes, the first trader jailed for rate rigging who has long protested his innocence.
In his first interview since he was acquitted, Connolly, 56 explains what the process did to his life and his family.
“I never thought I could be in any danger. I thought they were just tying up loose ends. As the judge said at my sentencing, I was not a player at all in Libor. Even after my 7-hour interview before DOJ, FBI, anti-trust lawyers, FSA/FCA, CFTC I was not worried. That was May 2013. Out of the blue, on April 28, 2016, my lawyer called and said I was now a target. Then I was charged on June 2, 2016.
They indicted me in secret, so that they could arrest me during my family trip to Mexico. My lawyer warned me off the trip (thank goodness). They do that so they can dump you in a shitty jail for 48 hours. Many people plead guilty after that. It’s called "softening them up".”
How does it feel to be acquitted?
I am very glad the court agreed that I was innocent. I had known it from the start, there was never a doubt in my mind.
What was the effect on you and your family of all this?
âIt has been a tough six years since I was charged. More for my family than even myself. I had the peace of KNOWING I was innocent, regardless of the "law". My family believed in me 100%, but it took a toll on them. Especially when the DOJ lobbied the judge for 15 years in jail. This process is designed to destroy people and ground them into powder.
Who do you blame?
âIt is still too early in the story to assign blame. I am waiting to see the rest of the evidence that I heard is out there. I have been able to obtain (mostly through my case) an incredible amount of evidence that implicates the Bank of England as well as the Fed. Do we want our kids and grandkids growing up in a world where this can be done by the powerful elites at will?
What are you going to do next?
âYou mean after I go to bourbon rehab? I’m kidding, that is just a family joke. I have many issues I will need to sort through before I can move forward. I have to figure out how to pay my lawyers, get my expired passport back, try to get a bank account or credit card, which were all closed before I even had a trial. I’m not complaining, I know I am one of the lucky ones.
How many others are wrongly convicted?
Everyone single one in the US and UK. âRegardless of what anyone thought of some of the conduct, with all the evidence I have seen, I am sure none of the Libor traders would have been convicted by an impartial jury. What was going on between senior executives at the banks with the Bank of England would change the whole narrative. It’s just plain shocking.I heard there is much more to emerge.
What should happen next?
âThe first step if for impartial journalists to continue questioning the narratives. I just want the truth to be exposed, what it then leads to is above my pay grade.
How did you trade Libor?
I knew nothing about Libor, only that it was never where it was supposed to be. I stopped using it in 2000 because I could not figure it out. We were all told that since all the banks were moving it a bit against each other, that when it went through the trimming process, that it all offset anyway. None of the three emails (the only evidence) were my trades. I did not trade it. They were other people’s Libor positions.
Do you get why the public isn’t sympathetic to traders/bankers?
âI totally understand why people don’t like us. I won’t ask for sympathy, only a chance to show people the evidence. I knew what I was fighting against. My view was, "I am 100% innocent. But I worked on Wall Street, I worked at Deutsche Bank, and this was a Libor trial. I figured my odds were 50/50 because of the narrative and the anger towards bankers. The main submitter against me said that the most my 3 emails could have made Deutsche Bank over two years was $7,800. Zero for me. He did the calculations under oath. And yet the prosecutors got to allude to the jury that we were responsible for the financial crisis. The lies were brutal.
Are you ok?
I am awesome. I love to fight, that is why I made it through working at a snakepit like Deutsche Bank. I was the guy who never got promoted because I like to call people out for stupidity/greed in meetings! So in a bizarre way I have very much enjoyed myself over the last six years.
In the elevator during the trial, I was all happy and fired up to throw some punches and get to fight. Smiling, happy, no nerves. I asked my lawyer, "Wow, this is a great feeling. Does everyone go on trial feeling like this?" The answer I got back was a shake of the head, and a, "No, you’re kinda crazy."
Crazy but free?
Something like that.
