Saturday 21 October 2017

City trader who was 'ringmaster' of Libor fraud jailed for 14 years

Former trader Tom Hayes arrives at Southwark Crown Court with his wife Sarah.
Former trader Tom Hayes arrives at Southwark Crown Court with his wife Sarah.

Kate Ferguson

A City trader has been jailed for 14 years for his part in the Libor scandal that shook financial markets.

Tom Hayes (35) is the first person to be convicted by a jury of rigging Libor rates. He was described as the "ringmaster" in an enormous fraud to manipulate the benchmark interest rates.

The highly-paid ex-trader at UBS and Citigroup orchestrated a scheme to interfere with the rate in order to boost his own six-figure earnings, London's Southwark Crown Court heard.

In an audio clip he said "influencing" Libor was "commonplace" and admitted he was a "serial offender".

He had denied eight counts of conspiracy to defraud covering a period from 2006 to 2010, when he worked for Switzerland's UBS and America's Citigroup. But a jury of seven men and five women found Hayes, of Fleet, Hampshire, guilty of all eight counts. Hayes stared straight ahead emotionless as the verdicts were read out.

Hayes, a married father-of-one, has mild autism and was reported to have superhero bedding in his apartment. He also had a penchant for hot chocolate.

On the surface he was an unlikely criminal mastermind. But prosecutors said that behind the trader's idiosyncrasies lay a "ringmaster" who would "cajole", "beg" and "bribe" brokers into manipulating the rate.

Hayes hit out at what he said were attempts to cast him as the "Jesse James" of corrupt Libor markets during his trial.

Far from being like the Wild West outlaw, Hayes claimed he was dubbed "Rain Man" by colleagues - a reference to the Tom Cruise film about an autistic man.

And he was teased for his superhero bedding, telling jurors: "They used to laugh at me, I had the same superheroes duvet cover I had since I was eight.

"I didn't see the point buying a new one when that one was perfectly adequate."

He told how he shunned the City's drinking culture, preferring to sip on a hot chocolate while his workmates drank beer - earning him the nickname Tommy Chocolate.

He said: "I didn't know of that nickname, didn't think anyone would be bothered if I drank hot chocolate and they drank beer."

But behind his quirks and unassuming demeanour, Hayes was at the heart of a massive fraud to rig Libor which undermined the integrity of financial markets, prosecutor Mukul Chawla said.

He was "greedy" and driven by a desire for money, the court heard. Not satisfied with his large salary, he rigged Libor so he could impress his bosses and make millions, jurors heard.

Hayes told how his "love-hate job" was like a rollercoaster.

He said: "It could be the worst job in the world, could make you want to jump off a bridge and make you feel physically sick when you went into work.

"But the success when you got it right. That's like solving that equation, it's like seeing that number pop up on your screen. There's no subjectivity, you make money or lose money - it's so pure."

Hayes graduated from the University of Nottingham in 2001 with a degree in maths and engineering.

From 2001 to 2004 he worked for Royal Bank of Scotland, before moving to Royal Bank of Canada for two years.

In 2006 he joined the Swiss bank UBS in Tokyo as a trader, before moving to America's Citigroup in 2009, remaining in Tokyo.

As a trader in yen Libor derivatives, he bet on movements of the daily rate banks are able to borrow from each other.

He admitted making "requests" concerning the Libor rate, but insisted lots of bankers were doing the same, and "no one batted an eyelid".

When he was arrested in December 2012 it "was like in the Twilight Zone", he said.

"I was made out to be the Jesse James of Libor, the Bobby Dazzler of Libor. I was being portrayed as the architect and the ringmaster of what was a global financial issue."

Irish Independent

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