Former City trader Tom Hayes has been found guilty at a London court of rigging global Libor interest rates.
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Judge Jeremy Cooke had urged the jury to consider the verdict “by the standards of reasonable, honest members of society”. He said, “Probity and honesty are essential as is trust”.
The prosecutor accepted that rigging was not confined to the banks at which Hayes worked: “He tried to rig, and in many cases succeeded in rigging, the rates at other banks”.
He becomes the first UK trader to be convicted in the LIBOR scandal.
The London trial that kicked off on May 26, marks a new phase in a seven-year, global inquiry that has seen 21 people charged and some of the world’s most powerful banks and brokerages pay around $9 billion in regulatory settlements. Citigroup has been censured by Japanese regulators over its involvement.
When the judge announced his sentence, Hayes – dressed in a light blue shirt and dark blue jumper with black slacks – put his head in his hands and ran his hands through his hair. After a period working for the Royal Bank of Canada, he joined Union Bank of Switzerland in 2006 in its Tokyo office selling yen derivatives. There were “others above him who were aware of the activity”. Nope, Hayes was convicted, sentenced and on his way to prison within an hour. Hayes would then place large bets on financial markets that were sensitive to Libor moves.
At the time US Assistant Attorney General Lanny Breuer said: “Make no mistake, for UBS traders the manipulation of Libor was about getting rich”.
The case reportedly sparked a rare spat between the Serious Fraud Office and the US Justice Department.
“In his own words, he was greedy”. Citigroup reported the incident but let him keep his bonus.
Hayes encouraged him to buy a “few drinks” for his colleague at HSBC in an effort to influence where the bank set its yen Libor rate.
But he subsequently pleaded not guilty and opted to defend himself at trial.
In court, Hayes called the interviews a “catalog of mistakes”, half-truths and falsehoods.
His wife subsequently said the sentence was “horrific” as she made her way out of the courtroom.
“No one has thrown Mr Hayes under the bus”, Mr Chawla said in his closing argument. As Mr. Hayes continued speaking, his eyes also welled with tears.
Because of his recent diagnosis with Asperger’s syndrome, Mr. Hayes had the aid of an “intermediary” during his almost two weeks on the stand, helping to calm him down when he got agitated.
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UBS said in a statement that it wasn’t a party in the case. “The bank has resolved this legacy matter with most authorities and is committed to reducing operational risks and upholding a culture of doing the right thing”.
