A Manhattan federal judge on Tuesday questioned why a former UBS AG trader’s bid to dismiss a criminal case accusing him of scheming to manipulate the Libor rate should even be considered when the U.S. government calls him a fugitive.
Lawyers for Roger Darin, a Swiss citizen, had asked U.S. District Judge Paul Crotty to overturn a federal magistrate’s decision in March that rejected an earlier bid to dismiss the Justice Department’s complaint.
Crotty asked why Darin’s arguments should be given any weight since he has never appeared in court to face the charges and has remained in Switzerland to avoid arrest.
“He wants to make all of these arguments long distance,” Crotty said.
Bruce Baird, Darin’s lawyer, asked Crotty to nonetheless consider his client’s contention that the Justice Department had overreached in charging a foreign citizen for conduct that occurred overseas.
To allow the charges to remain pending, Baird said, would be “arbitrary or fundamentally unfair.”
Darin was charged by U.S. authorities in 2012 alongside a former UBS colleague, Tom Hayes, who has been on trial in Britain since May facing separate charges of conspiracy to defraud by Libor rate rigging.
Hayes, a former UBS yen derivatives trader based in Tokyo, has pleaded not guilty. He is the first defendant to face a trial following a global investigation that resulted in billions of dollars in settlements by various banks, including UBS.
Libor, or the London interbank offered rate, is a short-term rate that underpins hundreds of trillions of dollars of financial products from mortgages to credit card loans.
According to U.S. authorities, 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 Hayes 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. The Justice Department calls him a fugitive.
Thomas Hall, a prosecutor, told Crotty that ruling for Darin would give other Libor defendants who have not appeared in court reason to mount similar challenges.
“They are all watching these proceedings with great interest,” Hall said.
The case is U.S. v. Hayes, et al, U.S. District Court, Southern District of New York, No. 12-mj-03229.