The World in U.S. Courts: Spring 2015 - White Collar Criminal Law
March.20.2015
Hayes and his alleged co-conspirator, Darin, were charged with wire fraud in connection with their alleged rigging of the LIBOR index for Japanese Yen. Hayes worked in Japan, and Darin in Singapore. Darin moved to dismiss on grounds that the U.S. wire fraud statute, 18 USC § 1343, did not apply to the extraterritorial conduct as alleged.
Although it noted that courts had reached different decisions on the point, the U.S. District Court in New York noted that binding Second Circuit precedent held that the wire fraud statute did not have extraterritorial effect. The law nevertheless reached any use of U.S. interstate means of electronic communication, and it found the complaint satisfied that jurisdictional requirement through its allegation the co-conspirators purportedly caused the manipulated LIBOR rates to be published to servers in the U.S., and used U.S. means of communication to memorialize trades affected by those rates. The District Court thus concluded that the issue of extraterritoriality had not been implicated.