(Adds background, details on scandal)
By Nate Raymond
NEW YORK, March 20 (Reuters) - A former trader at Dutch lender Rabobank pleaded not guilty on Friday to U.S. charges that he engaged in a scheme to manipulate Libor, the benchmark interest rate at the center of global investigations into misconduct at various banks.
Anthony Allen, a British citizen who was Rabobank’s former global head of liquidity and finance, entered his plea at a public hearing in Manhattan federal court.
He is the first defendant charged by the U.S. Department of Justice to waive extradition to fight Libor-related charges.
Libor, or the London Interbank Offered Rate, is a key short-term rate banks charge each other for loans. The benchmark rate underpins hundreds of trillions of dollars of financial products from mortgages to credit card loans worldwide.
U.S. and European authorities have been probing whether banks attempted to manipulate the rate to benefit their own trading positions.
The probe has resulted in over $6 billion in settlements with banks and brokerages and several people being criminally charged, including 11 in the United States.
Allen was indicted in October for conspiracy and wire fraud, becoming one of six former Rabobank employees to be charged in the United States as part of the investigation.
Rabobank agreed in 2013 to pay $1 billion to resolve U.S. and European probes into Libor manipulation, including a $325 million penalty and a deferred prosecution agreement with the Justice Department.
Prosecutors say Allen participated in a scheme to manipulate the U.S. dollar and Yen Libor rate in order to benefit Rabobank’s positions in derivatives linked to those benchmarks.
U.S. prosecutors last year secured their first guilty pleas in the case from Paul Robson, a former Rabobank Libor submitter, and Takayuki Yagami, a former derivatives trader.
The Financial Conduct Authority in the United Kingdom on Tuesday banned Robson from Britain’s financial services industry.
Other Rabobank defendants facing U.S. charges include Libor submitter Anthony Conti and traders Tetsuya Motomura and Paul Thompson. The three have yet to appear in court.
Conti’s attorney, Tor Ekeland, said his client planned to waive extradition and appear in Manhattan federal court in April.
The case is U.S. v. Robson, U.S. District Court, Southern District of New York, No. 14-cr-00272. (Reporting by Nate Raymond in New York; Editing by Diane Craft and Alan Crosby)