Ex-Deutsche Bank Trader Acquitted of Fixing Euribor Rate

(Bloomberg) -- A former Deutsche Bank AG executive was acquitted of helping to manipulate a benchmark interest rate by a London jury, as U.K. prosecutors failed to win the conviction of a high-level manager in its years-long rate-rigging probe.

Andreas Hauschild, a former senior banker in Frankfurt, was found not guilty Thursday. He was charged with conspiring with fellow Deutsche Bank trader Christian Bittar, "the big fish in London," to fix the Euribor rate, which is tied to trillions of dollars worth of loans and derivatives.

Sitting in the dock, Hauschild breathed a sigh of relief, grabbed the leather bag he’d packed in case he was sent to jail, and hugged his wife. Hand-in-hand they disappeared into the afternoon sun.

The acquittal of the manager means the Serious Fraud Office has won slightly fewer than half of its rate-rigging trials. Hauschild, a 16-year veteran at Deutsche Bank, was among the most senior officials to be tried. Euribor is the euro interbank offered rate, a benchmark made up by submissions for dozens of lenders, who measure the cost of borrowing between each other.

“I have always maintained my innocence of the charge against me and I am very pleased that today’s decision has vindicated my position,” the 54-year-old said in a statement. “The last several years have been very difficult for me.”

Hauschild is a German resident who was able to avoid trial in the U.K. for years before he was arrested last year in Italy.

He "ruled the roost" from his desk in Frankfurt where he managed the cash position for the bank, prosecutors at the SFO said. While he never directly set the rates, prosecutors alleged the managing director used the submissions to help his desk and his own trading positions.

‘WILL DO’

He did this both in collusion with Bittar, who was himself convicted and sentenced to more than five years in prison, and sometimes in opposition when it suited his own wishes, the SFO said. In one message played to the jury, the executive responded to a Bittar message requesting a certain submission with a note that said "YES WE WILL DO."

Much of the cross-examination focused on a trio of traders under Hauschild at Deutsche Bank. Ardalan Gharagozlou, Joerg Vogt and Kai-Uwe Kappauf remain in Germany. When the prosecution lawyer James Waddington said the three were “behaving dishonestly in relation to Euribor submissions,” Hauschild replied, “Yes.”

The jury was shown a message that Bittar sent to Vogt in August 2006 saying “THX FOR YOUR HELP ON THE FIXING - WAS MUCH BETTER THAN I HOPED FOR!” Vogt replied, “MY PLEASURE.” In another message that month, Bittar asked Vogt for “FAVORS ON THE FIXINGS” and Vogt replied “WILL DO MY BEST.”

Even if he accepted his colleagues were involved in wrongdoing, he consistently denied he had a part in it.

To contact the reporters on this story: Jonathan Browning in London at jbrowning9@bloomberg.net;Franz Wild in London at fwild@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser

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