A lawyer for a former UBS AG trader charged with engaging in a fraud conspiracy following a U.S. investigation of Libor rate manipulation on Monday urged a New York federal judge to dismiss the case.
An attorney for Roger Darin, a Swiss citizen who has not appeared in court to face the charges, argued that Darin's alleged conduct occurred overseas and had little to no connection to the United States.
In the first public showdown stemming from the government's broad probe of alleged Libor rate manipulation, Bruce Baird, Darin's lawyer, argued his client could not have expected to face charges from the U.S. Justice Department just because the yen Libor rate was published globally.
"Even DOJ will agree they can't charge anyone anywhere in the world for what they consider to be a crime," he told U.S. Magistrate Judge James Francis.
Thomas Hall, a U.S. prosecutor, countered that Darin could have anticipated the New York markets would be impacted by the Libor rates.
"It's the global financial capital of the world," he said. "Of course its foreseeable."
Darin, 43, is one of 11 individuals charged in the United States following global investigations stemming from alleged manipulation of Libor and related rates.
Libor, or the London interbank offered rate, is calculated based on submissions by a panel of banks. It is used to set interest rates on credit cards, student loans and mortgages, and underpins hundreds of trillions of dollars of transactions.
Darin was charged in 2012 as a Japanese subsidiary of UBS pleaded guilty to a wire fraud charge as part of a $1.5 billion accord resolving probes by regulators in the United States, United Kingdom and Switzerland.
Prosecutors said Darin, who while at UBS worked in Singapore, Tokyo and Zurich, was primarily focused on trading yen-dominated short-term interest rate derivative products.
The complaint said Darin conspired with Tom Hayes, a British citizen who worked as a senior yen swaps trader for UBS in Tokyo, to commit wire fraud by agreeing to submit yen Libor opinions to benefit Hayes' positions.
Darin has never appeared in U.S. court, and Switzerland does not extradite its citizens. But his life has nonetheless "come to a halt," Baird said, as he has no job, cannot travel, and has even delayed marriage.
Hayes, who was also charged with wire fraud and a price fixing violation, faces separate charges stemming from the rate-rigging probe in the United Kingdom, where he is awaiting trial.
The case is U.S. v. Hayes, et al, U.S. District Court, Southern District of New York, No. 12-mj-03229.
