Friday 30 September 2016

Citigroup managers knew of rate fixing, accused claimed

Liam Vaughan and Gavin Finch

Published 03/06/2015 | 02:30

Citigroup
Citigroup

Citigroup managers knew about Thomas Hayes's attempts to manipulate benchmark interest rates, the trader said in a 2010 letter written days after he was fired by the US bank.

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The note, shown to jurors on the fifth day of Hayes's fraud trial, was sent after Hayes was dismissed following an internal investigation found he had tried to manipulate Libor by making requests of brokers and traders to submit favourable rates.

"My actions were entirely consistent with those of others at senior levels in Citigroup Global Markets Japan," Hayes wrote in the September 9, 2010, letter to a human resources executive at the bank shown to jurors by prosecutors yesterday.

"Senior management at CGMJ were aware of my actions and at no point was I told that my actions could or would constitute any wrong-doing."

The 35-year-old is accused of eight counts of conspiracy to manipulate the London interbank offered rate, the benchmark used to value more than $350 trillion of loans and securities, from 2006 through September 2010. The former trader, who worked at banks including UBS Group and Citigroup, has pleaded not guilty. On the day of his dismissal three days earlier, Hayes received a letter from Brian McCappin, head of Citigroup's investment bank in Japan, laying out the grounds for his firing.

"You attempted to manipulate the yen Libor and Tibor rates in order to benefit your trading positions," McCappin wrote in the letter. "Such conduct is in clear violation of provisions of the Citi code of conduct, resulting in the potential for serious regulatory or reputational harm."

Hayes was allowed to retain a signing on bonus of about £2.2m, according to the letter.

Irish Independent

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