The US Justice Department indicted two ex-Deutsche Bank traders for LIBOR fraud

The Department of Justice in the US indicted two former Deutsche Bank traders with one count of conspiracy to commit wire fraud and bank fraud and nine counts of wire fraud related to the manipulation of LIBOR.

The DoJ confirmed in a statement that charges were filed against 51-year-old Matthew Connolly from New Jersey, US, and 46-year-old Gavin Campbell Black from London, UK.

The charges in federal court in Manhattan allege "participation in a scheme to manipulate the USD LIBOR rate in a manner that benefited their own or Deutsche Bank's financial positions in derivatives that were linked to those benchmarks."

The DoJ alleges in the filing that Connolly "directed his subordinates" to "submit false and fraudulent LIBOR contributions consistent with the traders' or the bank's financial interests rather than the honest and unbiased costs of borrowing" when he was Deutsche Bank's director of the Pool Trading Desk in New York.

Black traded USD LIBOR-based derivative products at the time on Deutsche Bank's London Money Market Derivatives (MMD) Desk in London. He is accused of same thing - this time directing another former employee to allegedly submit false LIBOR numbers.

The former employee was Michael Curtler, 43, who actually pleaded guilty in October 2015 to one count of conspiracy to commit wire and bank fraud in connection with his role in the scheme. He was a former Deutsche Bank derivatives trader and manager of the London Money Market Derivatives (MMD) Desk in London.

LIBOR stands for the "London interbank offered rate" and is a measure of what interest rate banks would lend to each other at. While it may sound like an obscure high finance instrument, it is used to set the price of trillions of dollars of products.

The DoJ said Connolly was arrested on Thursday to answer to his charges. He has since been released on a $500,000 bond after pleading not guilty at a hearing.

Connolly's lawyer Kenneth Breen told Reuters that the allegations against his client "are untrue, and he looks forward to clearing his name in court."

A lawyer for Black has yet to make a public statement.

The DoJ said: "The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law."