NEW YORK, July 10 (Reuters) - A former Deutsche Bank trader whose conviction in New York for rigging the Libor interest rate benchmark was overturned has settled his $150 million lawsuit accusing the German lender of making him a scapegoat by lying to prosecutors.

Matthew Connolly, who once led Deutsche Bank's pool trading desk, voluntarily dismissed his lawsuit accusing Deutsche Bank of malicious prosecution on Wednesday, a filing in Manhattan federal court showed.

A spokeswoman for Deutsche Bank said "the matter has been resolved," without providing details. Lawyers for Connolly did not immediately respond to requests for comment.

Connolly and London-based colleague Gavin Black were convicted in 2018 for rigging Libor, with Connolly sentenced to six months of home confinement and a $100,000 fine.

But an appeals court overturned both convictions in January 2022, citing a lack of evidence of guilt.

Connolly said Deutsche Bank saw him as a "perfect fall guy" to insulate top executives responsible for rigging. The married father of two said his reputation and life were destroyed.

Last October, U.S. District Judge Jesse Furman in Manhattan refused to dismiss Connolly's lawsuit.

Short for London interbank offered rate, Libor underpinned hundreds of trillions of dollars of credit cards, mortgages and other financial products before being phased out in 2022.

Libor probes led to about $9 billion of fines worldwide for banks, including $2.5 billion for Deutsche Bank in 2015.

Black is also suing Deutsche Bank for malicious prosecution, seeking $30 million.

A New York state judge in Manhattan refused in December to dismiss Black's case. Deutsche Bank's appeal from that decision is on hold until at least September, court records show.

Black's lawyers did not immediately respond to requests for comment.

Connolly's case is Connolly v. Deutsche Bank AG, U.S. District Court, Southern District of New York, No. 22-09811. Black's case is Black v Deutsche Bank AG et al, New York State Supreme Court, New York County, No. 150762/2023, and New York State Supreme Court, Appellate Division, 1st Department, No. 2024-00623. (Reporting by Jonathan Stempel in New York; Editing by Richard Chang)