A City trader has been jailed for 14 years for rigging Libor rates in a bid to boost his own seven-figure earnings.
Tom Hayes, 35, was named as the “ringmaster” of an enormous fraud to manipulate Libor – the benchmark interest rate that indicates what banks expect to pay to borrow from one another. Earlier on Monday a jury found Hayes guilty on eight counts of conspiracy to defraud.
Hayes was a trader in Libor derivatives, meaning his job involved effectively betting on the daily movements of the Libor rate.
In an audio clip played to a jury at Southwark crown court, Hayes was heard to say “influencing” Libor was “commonplace”, and admitted he was a “serial offender”.
The court was told how the highly-paid ex-trader at UBS and Citigroup would “cajole”, “beg” and “bribe” other brokers through “corrupt” trades to help manipulate Libor.
Mukul Chawla QC, prosecuting, said: “On an almost daily basis he set out to dishonestly manipulate or rig Libor at his bank and other banks.”
Hayes was described as “extremely intelligent”. He worked for Royal Bank of Scotland and Royal Bank of Canada before joining UBS in 2006 as a trader in Tokyo.
He was paid £1.3m before tax in salary and incentives by UBS from September 2006 to December 2009. He joined Citi in 2009 after he “felt that UBS were not paying him enough”, and received £3.5m before tax for just nine months’ work.
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?”
Mr Chawla said: “He behaved in a thoroughly dishonest and manipulative manner by repeatedly cheating those with whom he had entered into huge financial transactions.
“The motive was a simple one: it was greed.”
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Hayes had denied eight counts of conspiracy to defraud covering a period from 2006 to 2010 when he worked for UBS and Citigroup.
Though he admitted his part, he claimed it was not dishonest and his bosses knew what he was doing.
A string of banks including Barclays, Lloyds Banking Group, the Royal Bank of Scotland and Deutsche Bank have been fined billions of pounds for their part in the Libor scandal.
Hayes was fired from his job with Citigroup after his actions were reported to senior management. He was arrested towards the end of 2012.
He will be sentenced shortly and also faces the possibility of extradition to the US to face further charges.
Swiss bank UBS on Monday distanced itself from its former trader saying: “UBS was not a party to this case.
“It was a matter between the SFO and Mr Hayes and UBS has no comment. 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.”
Citigroup said it has no comment.