Buttsore Blog


     5/18/2022   Untold Bill Broeksmit/Deutsche Bank Tragedy

By Matthew Connolly

     By the time I found out who Val Broeksmit was, and that we may have had information to swap, he was already fully indoctrinated by David Enrich, the FBI and certain politicians into the Deutsche Bank/DBTCA/Trump/Russian fantasy. You know the one. Many fun little strings to pull, none of those strings leading anywhere. You can read about that somewhere else. It was October of 2019 when David Enrich’s article on Val was published.(1) It was also three weeks before I was to be sentenced to jail for manipulating Deutsche Bank’s Libor from 2005 to 2008.(2) To say it was the lowest time in my life was not an overstatement. 

      I felt a pull to contact Val. I never knew why until later. I think it was a combination of a strong gut feeling that we were in some way ‘connected’, combined with my lust for exposing the truth of what happened at Deutsche Bank in Libor. I contacted him on Twitter via Direct Message. He responded promptly and seemed to be willing to speak to me just because I told him I was a Deutsche Bank alumni. He was extremely polite and courteous. A very likable fellow. I could tell, while being polite, he had no interest in speaking details with me. I asked him a few questions and supplied him with the limited information I had accumulated on Deutsche Bank’s Libor investigation at the time. He was not receptive, but in his vague answers I was able to further decrypt some of his knowledge of the subjects of banking, Deutsche Bank and Libor. He asked me whether I knew Christian Bittar which I knew at the time was a very interesting question to ask. When I decided it would be rude of me to keep pushing him on a subject he had no interest in, I wished him the very best, expressed my hope he found what he was looking for, and went on my merry way. Only I gleaned from our conversation that I was on the right track. I decided to not only keep digging for my benefit, but that anything I found shedding light on the truth might be comforting to him. Time to rewind and add some context.

     After leaving Deutsche Bank in disgust in 2008, I was contacted by the FBI (after they were in front of my house) in February of 2013 to speak to them. Since I left banking in 2008, the only contact I had with the bank were a few informal contacts between 2009 and 2012 asking me to return to the bank. In 2011, I was asked to come back to New York or London, to “help clean up this Libor mess.” I was also told I was cleared by the internal Deutsche Bank investigation. I thought nothing of it because I was never involved in Libor that I remembered, or the setting process at all. I declined all offers, as there was no way I was ever returning to that snake pit. I had declined other offers too, thankfully declining running a trading desk in Greenwich, Connecticut for Royal Bank of Scotland. Happily onto other endeavors. 

     To make a long story short, after a uselessly long interview with the FBI, DOJ, CFTC, UK FCA, et al. in May 2013, I was indicted for Libor manipulation on June 2, 2016. (Target: A Scapegoat’s Guide to the Federal Justice System, Matthew Connolly, 2020 for the full story). 

     After my indictment, I pulled every dark string in my mind to try to understand how I got here. One dark string was the string where I had been told that I had been cleared in the investigation by Deutsche Bank. So how could I then be indicted? 

     That is where Bill Broeksmit comes into my life. I did not put all the puzzle pieces together until after my sentencing in October, 2019. What I did not know early on was that there were multiple Deutsche Bank Libor investigations that went on between 2009 and 2013. Two internal investigations (at least), plus an external “investigation” by the legal firm Paul, Weiss, Rifkin etc etc at the direction of the US DOJ and FBI. Deutsche Bank paid $100 million to Paul, Weiss to investigate itself. It was a confusing and bizarre time for Deutsche Bank. It took me hundreds of hours to begin to unwind this. Now for the meat of the story.

      Bill Broeksmit was heavily involved in the two internal Libor investigations between 2009 and 2011. Those investigations were separate from the Paul, Weiss and DOJ, FBI investigation. The first one was the investigation into huge Libor/Euribor spread trade that was put on in 2008 and 2009. That spread trade, mostly attributed to Christian Bittar, was put on globally in London, New York and Frankfurt. The revenue on that trade ended up being $2.5 Billion.(3) It was probably the reason Deutsche Bank did not need a bailout. The profit from that trade was deemed as “above board” after the investigation. 

     The next investigation was a general internal investigation into Libor. There were other people involved in the investigation as well. But Bill was Anshu Jain’s ‘go-to’ guy in these situations.(4) After the conduct was sifted through, most traders at Deutsche Bank were cleared. As a matter of fact, most traders’ communications in Libor were deemed so inconsequential that those traders were never even officially under investigation. I was one of those cleared for my three Libor emails, never even under investigation. When my securities license was updated to show my indictment in 2016, it denoted that I had never been under investigation at any time up until my indictment on June 2, 2016. 

     During that same investigation, two traders were fired when chatroom transcripts of colluding with other banks to coordinate positions and Libor settings were uncovered. One of those traders was Christian Bittar. That was the time period when I was approached to re-join the bank. 

     While those investigations were going on at Deutsche Bank, there was a whole separate investigation going on by Paul, Weiss, Rifkin etc. The government forced DB to pay the $100 million for investigation, but the Department of Justice, FBI and CFTC were directing the investigation. In July of 2012, the Wall Street Journal ran a story on the Barclays Libor investigation.(5) The story was leaked by the Commodity Futures Trade Commission (CFTC) and turned all the investigations upside down. It was at that time that the game changed. The CFTC just arbitrarily made every Libor communication (interbank or intra bank) against the rules and against the law. Astoundingly inaccurate. 

     Now the investigations in the United States and UK changed tones. The race was officially on to prosecute and fine all the banks. You had the UK’s FSA (FCA’s predecessor), DOJ, FBI, CFTC, NYDFS, all racing for the fine money$$££ and the glory. It careened out of control globally. It caused a problem at Deutsche Bank. And a problem for Bill Broeksmit.

     As the Paul, Weiss investigation was being turned over to the DOJ/FBI in mid 2013, the questions internally at DB were, “Who the hell exonerated all these people for their Libor communications? How was all this missed?” Senior managers at Deutsche Bank needed someone to point the finger at. Bill was the guy. Anxiety. The Wall Street Journal reported he was depressed with anxiety and felt like his co-workers had abandoned him.(6) Was he in danger of being charged in Libor? Could he be charged with obstruction of Justice? 

     It was right around that time when the DOJ started interviewing junior’s at Deutsche Bank. The pressure was ramping up significantly. The public was baying for blood. Typically, the DOJ and FBI start at the bottom then use those small-fry’s to make cases against those higher up on the food chain. Bill was high on the food chain and most likely had an idea of where this was headed. He committed suicide in January of 2014. Tragic. 

     Remember, I had no idea that any of this was happening or who Bill Broeksmit was until October, 2019.

     After I was surprisingly indicted in 2016, I spoke to one of the Deutsche Bank people that talked to me about possibly returning.

     Me: “You told me I was exonerated! How did I end up here?”

     Him: “It did not end up well for the guy that cleared you all.”

     At the time, I never thought a thing of this. You can probably guess now that I think that cryptic comment was referencing Bill Broeksmit. 

     I never put any of this together until David Enrich published his hit piece on Val Broeksmit a month before my sentencing. It was in the New York Times and entitled, “Me and my whistle-blower.” Reading that led me to contacting Val. I had spoken to David Enrich previously, as he used my first book, (Teethmarks on My Chopsticks: A Knucklehead Goes to Wall Street, Matthew Connolly, 2019) as a source for his Deutsche Bank ‘Dark Towers’ book. David had asked me if I knew Bill Broeksmit. I had heard his name, but never knew him. We left it at that. 

     When I contacted Val before my sentencing and he had no interest, I decided I would keep digging to see what I could find on my own.

     As I was digging around looking for anything Deutsche Bank Libor related, and waiting for my appeal decision to be announced, it hit the papers in October 2021 that the CFTC had decided to pay a “whistle-blower” that helped with the Deutsche Bank Libor investigation $200 million.(7) $200 million. Since I was still convinced I was 100% within the rules and innocent, I was obsessed with finding out the story of how our government could pay a $200 million reward for something purely legal. I uncovered documents regarding the whistle-blower, and what the whistle-blower provided that was so “critical.”(8) I was disgusted.

     Three months after the “whistle-blower” was rewarded, the Second Circuit appeal board of the United States ruled that I should be acquitted, that no crime was committed and nothing was false or fraudulent. Just as I had been saying from the beginning. 

     As it turns out, someone at Deutsche Bank blew the whistle on conduct that was within the rules and legal. I found documents that the “whistle-blower’s” evidence contradicted Bill Broeksmit’s finding in 2009 that the huge spread trade’s revenue was above board. The ruling in my case made how Deutsche Bank was setting Libor in relation to its spread trade perfectly within every permitted conduct. It also made Bill right all along. How is that for irony?

    So not only was I fully exonerated in January 2022, but I immediately felt that Bill was too. I never got a chance to make my case to Val. I’m not sure if it would have helped or hurt him anyway. There is much more to this story believe it or not. It will come out over time.

   People died over this. Unnecessarily. Tragic.

   Rest in peace Bill. Rest in peace Val.










2/8/2021    Implications of “Range” in Libor cases

                                                            By Matthew Connolly

      My Libor case and trial were entirely about whether a “reasonable range” of possible Libor settings could be used for Deutsche Bank’s calculation. You can call it whatever you want. “Reasonable Range.” “Leeway.” “Flexibility.” “Shading.” “Fine tuning.” “Discretion.” It’s all the same fucking thing. The naming of it is so ridiculously unimportant to the facts of the case. As soon as any discretion is allowed, I am fully innocent and there can be no other answer unless something underhanded is going on. Especially when you take into account that I was sitting in New York and had no idea how the British Banking Association (BBA) and John Ewan instructed the submitters to choose which rate to input. 

     The amount of evidence that every Libor setting had multiple different accurate answers is overwhelming and only a very incompetent person, or a person with self-serving goals could dispute that. In 2008, the CME Libor letter was published. (https://mconnollyittm.com/wp-content/uploads/2019/01/2008-CMELibor-Letter.pdf). Here is the actual wording on this official piece of evidence: “A Contributor Panelist who can borrow ‘in reasonable market size” at any one of a wide range of offered rates commits no falsehood if she bases her response to the daily Libor survey upon the lowest of these (or the highest, or any other arbitrary selection from among them).“ Evidence.

     We also have the manager of Libor during this time, John Ewan, testifying that each bank had multiple different options for each rate input. He testified under oath in trials in the UK. When that information emerged, the defendants were acquitted very quickly because that is what the whole case hinges on! (https://www.bbc.com/news/business-39225858). Evidence.

     As a matter of fact, during my trial in October 2018, a senior prosecutor for the Department of “Justice,” Brian Young, was FORCED to disclose to my lawyers that indeed, there was a “range” in Libor and that John Ewan would testify to that fact. We could not get that fact into our trial or in front of the jurors. All part of the crooked chess game. Remember this paragraph, it gets important later.

     So even though “the range”/discretion was indisputable by the time of my trial, the prosecutors denied it and continued to argue something they knew was not true. That disgusts me. As detailed in a previous blog post about Deutsche Bank “flippers” testifying, whenever a person is interviewed by the FB”I”, the agent produces what is called a 302. A summary of the interview. I read fifty 302’s of traders and submitters at Deutsche Bank and other banks. Many of them mentioned some type of discretion regarding the rates. Most used different names for it. Leeway. Flexibility. Discretion. Fine tuning. Shading. Many of the Deutsche Bank interviews mentioned types of discretion also. It made me sick when those same traders/submitters/flippers/RATS then made their deals with the prosecutors and changed the facts and history to convict me and save themselves. 

     The sad thing about this whole process is all the defense lawyers, prosecutors and judges know that witnesses lie in court for their “deals.” It’s just a fact of life for them. Fucking scary. If my jury was allowed to read the FB”I” 302’s from the rats in my case from Deutsche Bank, I’d have been acquitted in 32 seconds. Their stories all changed, from statements that matched the documents we had from the time, to a made up fantasy that the prosecutors brow-beat them into. That is why the Department of “Justice” and the FB”i” will never agree to taping interviews. They depend on being able to pick and choose what they write down, as well as making sure as stories change a jury will never see that. If I did not live through it, I would have never believed it. 

     Incredibly, six months after my trial, in our post trial motions to get my conviction overturned or to get a new trial, the judge actually wrote that there was no evidence presented at trial that there was a “reasonable range.” She even wrote that one of the witnesses testified that he had never heard the words “reasonable range” until the investigation had begun in 2011. At the same time, even after the Department of Justice disclosed to us during the trial that there WAS a range, they now reversed and denied that flexibility or discretion existed. Sickening. 

    It got worse. The sole reason the judge refused to throw out my conviction was based on there being “no reasonable range” and the Deutsche Bank witness saying he did not hear “those words” until years after. She used ‘word play’ to push my conviction through. Word play. That witness, in his FBI 302’s used “leeway” to defend his Libor settings. I had been told in 1996 that banks had “flexibility” in their decision to choose each rate. Other people called it “fine tuning.” You get my point. It was just an excuse to make sure some Deutsche Bank assholes pay the price. Unacceptable. 

    So, the whole theory that there was no “range”, “flexibility”, “discretion”, “leeway” to Libor settings back then is ludicrously preposterous. There is so much evidence and proof that no one with any integrity could deny that. It is time for someone (hopefully a court) to finally put to bed the myths about Libor and how it was built. So that those of us who were chosen for destruction can finally have the truth recognized and try to re-build our lives. 

        9/23/2020    Rats, liars, flippers and others

                                                      by Matthew Connolly

Book information at bottom of blog

       It is said widely in the legal community that prosecutors can get their “witnesses to sing…IF NOT COMPOSE.” That means their witnesses are incentivized to lie. I got a good, close look at that during my case and trial. I never fully understood that phrase, as we all assume a modicum of ethics from Federal prosecutors. What I missed in that story was the “win at any cost” mentality within the Department of “Justice.” Certainly you can extend that to the Federal Bureau of “Investigation” from my experience. Unfortunately for you, you are about to read my take on how this all fleshes out. 

     I am definitely a law & order type of guy. Without clear rules and expectations, society would descend into chaos. We may be witnessing that now but that is another matter totally. In any instance, work or personal related regarding law enforcement, my advice has always been the same. Just tell the truth. I believe most of us think that way. It’s the right way. The problem appears when people decide to lie. Because that gives those looking to manipulate the system the ability to use truthful statements by others in many unethical ways. 

     By my definition, you are a “rat” if you lie testifying or give evidence designed to convict/impeach others… for your benefit or your deal. By that standard all three ‘flippers’ at my trial are rats. One witness (Timothy Parietti), the judge even called out as a liar at my sentencing. One witness got “immunity” (James King), the others pled guilty. King I sympathized with, as I had heard during this process they (figuratively) had been beating the crap out of him since 2011. Deutsche Bank people crushed him, UK & US regulators crushed him, then the DOJ just had to blow him the rest of the way over with a feather. I actually felt bad for him… but he still lied as well after hundreds of hours of being brow-beaten by US prosecutors. The whole process is called coercive plea bargaining (http://georgemasonlawreview.org/wp-content/uploads/2020/08/Neily_Final_Web.pdf). Michael Curtler and Parietti both changed their official story AFTER getting their deals and pleading guilty. A clear quid-pro-quo and all lawyers on both sides (and the judges) know it happens. They accept it and that in itself should tell you how fucked up this process is. 

     The rat definition is for those that defile themselves and their self-respect in this process. I am more than happy for them to live with that. My three “flippers” will have much self-reflection in front of them as well. They know what I am talking about.

     In some of these Libor/Euribor cases in the UK, senior management from Barclays and Deutsche Bank got immunity and decided to testify against Juniors at those institutions. I am fine with that, the truth is the truth. However, these senior managers had their own involvement to hide. They lied in multiple ways to reduce their own exposure, sacrificing others so they could stay out of trouble. Rats. It’s pretty easy to do a google search on “Alan Cloete Deutsche bank BaFin” and you will ask yourself how the fuck this guy had the balls to testify against others and say the things he said. Rat. My judge actually said he was part of the group of senior managers that “orchestrated” the conduct I was prosecuted for. Disgusting.

     Plenty of liars that went into their interviews and played the odds. Many times from their lawyers advice. I saw it during twenty different interviews from my case and other Libor cases. Ignore all the documents they show you, act like you have a 70 IQ, and hope for the best. Hilariously, that was probably the best way to stay off the radar and out of this thing. I decided to go into my interview and just tell the truth. I could never live with playing the “idiot” and having that boomerang back on someone else. As it turns out, many did not give a shit. I guess they call that “good lawyering.” 

     Three of my supposed “counterparties” testified at my trial as well. Poor suckers. None of these three Federal Home Loan employees had a clue what Libor was or how it was set up. I don’t blame them at all. I never did a trade with any of them and they did not know me from a hole in the wall. Justice? Most of the shit they testified about I would agree with. But they were never told about the British Banking Association or how Libor was set up. I forgive you. You were used as well.

     Tom Hayes and Christian Bittar are two people who the press likes to beat on. Call me an asshole, but I do not like some of the things they were trying to do. Collusion, wash trades and pressure were not things I was comfortable with. However, neither one of them decided to rat on other people. They took their medicine. I give them credit for that. Tom Hayes had a trial that was a joke, Christian Bittar decided to plead guilty because he knew his UK trial would be a farce like the other trials. It’s a difficult process, many who think they are innocent decide it’s not worth the fight. I can definitely understand that. 

     I will now close, but there will still be more to come about this. The things still sealed in my case are outrageous, and more will also come to light in other cases as well. I continue to hope that judges and moderate DOJ and FBI folks will at some point take back control and make justice the goal and outcome of all cases. In the mean time, we soldier on.

 1/12/2020 DOJ prosecution theory that can make anyone a criminal

by Matthew Connolly

Let’s say you own Schwab S&P Index funds. Then you are on Social Media and someone asks you what your opinion of the S&P is. You, of course, say you want it to go higher. That person pushes up one stock in the index unbeknownst to you, MAYBE causing the whole Index of 500 to move micro minutely. Under the same theory I was prosecuted on, YOU could be prosecuted for manipulating the S&P 500 stock Index… Don’t say I did not warn you. That is exactly the theory I was prosecuted on in Libor.

11/23/2019        Every Libor conviction in US & UK was botched

                                                              by Matthew Connolly

     It’s not as complicated as it’s made out to be. That is what makes it frustrating. The real problem starts with an absolutely bungled investigation. Libor was built with a posted speed limit. Panel banks were supposed to follow certain rules. They were not publicly recognized, but there is overwhelming documentary evidence for the people who care to look. No one from the UK or US government cared to look all the way back in 2010. They just assumed the speed limit was 25 mph and acted accordingly. Remember, never assume anything, lest you make an ASS out of U and ME. I’m the ASS right now but the U part of that equation is on it’s way.

    Libor was specifically built for banks to trade against each other and shade their submissions. It was built for all that shading to zero itself out. I did not build it that way. I thought it was moronic. I’m on record way back in the early/mid 2000’s complaining about it. Communications with submitters that resulted in “in the range” submissions were 100% within the rules. Sections 4.b.ii and 7.b.ii of this official document lay out the rules using the word ARBITRARY. CME letter:  https://mconnollyittm.com/wp-content/uploads/2019/01/2008-CMELibor-Letter.pdf 

     The latter section even talks about what was against the rules (misconduct). Only banks coordinating their submissions (collusion) was against the rules. This document even discusses how many banks’ need to work together to affect the rate inappropriately. I will continue to challenge anyone to show me DOCUMENTS from the time to say i’m wrong. I have not seen one yet. 

     So as long as panel bank’s submissions were in the range (bank’s leeway) they were driving 35 mph in a 50 mph zone. 2017 Barclays trial: https://www.bbc.com/news/business-39225858 Within the rules, within the law. Period. People coordinating positions and submissions with other banks were suspect. So there was conduct and misconduct. Clear as day. 

     The problem came when all the alphabet soup agencies in the UK and US decided to lump everything together and not even do ANY investigation. This was back in 2010. FCA. FSA. SFO. CFTC. FBI. SEC. BBA. BOE. DOJ. NYDFS. The bigger the bureaucracy, the bigger the mistakes. Some banks fought this for a short time but when their banking licenses were threatened, it was time to fold like a cheap card table and start paying the fines. Total shakedown operation by the government. Then the prosecutions started….

     There was conduct and there was misconduct. I’m not a “there were no rules” guy. Those who pled guilty, you have to think somehow were involved in the misconduct part of the Libor mess. Or they were misled by their lawyers, or had other bad things to hide. 

     My problem is that I am a stubborn prick of an Irishman. I will fight until the last nails are pounded into my coffin the fact that I (and a bunch of others at other banks) got prosecuted and convicted for going 35 mph in a clearly marked 50 mph zone. The fact that the speed limit was dropped to 25 mph (in 2013) five years after I left Deutsche Bank and the business should not be my problem, but has become my problem. Random Libor people from the past have contacted me and confirmed I am 100% correct. They will speak at some point. I wait impatiently.

     Since EVERY Libor trial and conviction did not separate conduct from misconduct, every single one needs to be thrown out or redone. They were all tainted. Innocent people’s lives were destroyed in order to cover up the mistakes that were made all around during this nightmare of an “investigation.”  Including Bank of England misconduct:  https://www.bbc.com/news/business-39548313