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Defendant’s testimony in Libor criminal case is unusual strategy

The first US criminal trial on allegations of Libor rate-rigging by large banks will be getting more attention than usual this week as the lead defendant in the case takes the stand.

Anthony Allen, a former trader at Rabobank, began testifying on Tuesday in District Court in Manhattan to defend accusations that he and others manipulated LIBOR, the benchmark rate that many banks use to charge each other for short-term loans and to calculate interest rates on many loans worldwide.

Because white-collar workers accused of criminal activity typically choose not to testify, Allen’s testimony and cross-examination are sure to be closely followed, particularly given that U.S. prosecutors have been criticized for failing to successfully prosecute high-level employees of big banks in the past.

A former trader at UBS and Citigroup, Tom Hayes, testified at his trial in the UK this past summer on charges that he conspired to manipulate LIBOR. He was convicted and sentenced to 14 years in prison. Three other former Rabobank traders pleaded guilty to charges of manipulating LIBOR and testified earlier in the trial against A

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