ZURICH August 3 Swiss bank UBS on Monday distanced itself from its former trader Tom Hayes, who was found guilty of conspiracy to defraud in the first trial of a defendant accused of Libor interest rate rigging.
Advertisement
Hayes, a 35 year old former UBS and Citigroup yen derivatives trader based in Tokyo, pleaded not guilty to charges he conspired to rig the London interbank offered rate (Libor), a benchmark for $450 trillion of financial contracts and loans worldwide, between 2006 and 2010.
Hayes had denied the eight counts of conspiracy, arguing that Libor was unregulated when he was still working and that he had been transparent about requesting rate levels, which he said were within a “permissible” range.
Britain’s Serious Fraud Office (SFO) had alleged Hayes set up a network of brokers and traders spanning 10 leading financial institutions and cajoled or bribed them to help rig for profit rates designed to reflect the cost of inter-bank borrowing.
Libor is the key interest rate that determines the price at which bankers in the City lend money to each other, and it has been the subject of investigation for a number of years.
Hayes stared straight ahead emotionless as the verdicts were read out.
Hayes, a highly-paid ex trader at UBS and Citigroup, orchestrated a scheme to interfere with the rate to boost his own six-figure earnings.
Justice Cooke said Hayes was the “centre and hub” of the manipulation.
He joined Citi in 2009 after he “felt that UBS were not paying him enough”, and received £3.5 million before tax for just nine months’ work.
“He behaved in a thoroughly dishonest and manipulative manner by repeatedly cheating those with whom he had entered into huge financial transactions”, Chawla said.
The prosecutor said Hayes immediately set about rigging Libor in his new job, sending a message on his first day trading with UBS, September 29 2006, saying: “Do me a favour and get the Libor rate up?”
“The motive was a simple one: it was greed”.
Hayes claimed he was taking part in an “industry-wide” practice.
Advertisement
He is to be sentenced shortly.
