City trader Tom Hayes convicted of rigging Libor rates


A City trader has become the first person to be convicted by a jury of rigging Libor rates in a scandal that shook financial markets.

Tom Hayes, 35, was 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.

His wife and parents sat with their heads bowed as they heard the verdicts.

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.

Dozens of traders have been fired and one person, whose name and bank cannot be reported, has pleaded guilty to their role.

A two-month trial heard Hayes, who has been on legal aid, was at the helm of a plot to rig Libor that "struck at the very integrity of that system".

Described by the judge Mr Justice Cooke as "by nature a gambler", he was driven by a thirst for money.

He told investigators after his arrest in December 2012: "You want every little bit of money you can possibly get."

Mukul Chawla QC, prosecuting, said Hayes would "cajole", "beg" and "bribe" brokers through "corrupt" trades to help manipulate Libor.

He said: "On an almost daily basis he set out to dishonestly manipulate or rig Libor at his bank and other banks."

Hayes built up a network of traders to help him carry out the fraud, even attempting to drag his younger stepbrother Peter O'Leary in.

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.

And Hayes once offered to pay a contact 100,000 US dollars if he kept the Libor rate as low as possible.

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."

The prosecutor added: "He was the ringmaster at the very centre, telling others around him what to do and in a number of cases rewarding them for their dishonest assistance."

Hayes, described as "extremely intelligent", worked for Royal Bank of Scotland and Royal Bank of Canada before joining UBS in 2006 as a trader in Tokyo.

He was paid £1.3 million 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 £3.5 million before tax for just nine months' work.

The prosecutor said Hayes immediately set about rigging Libor in his new job. He sent a message on his first day trading with UBS, on September 29 2006, saying: "Do me a favour and get the Libor rate up?"

A trader in yen Libor derivatives, he effectively bet on movements of the daily rate at which banks are able to borrow from each other.

He rigged the submissions made by the panel banks, used to calculate that rate.

He was sacked after his methods were formally reported to senior management.

He was arrested in the UK in December 2012.

Hayes, who has mild Asperger's syndrome, admitted his part but claimed it was not dishonest and his bosses knew what he was doing.

He faces the possibility of being extradited to the US where he was charged over Libor rigging in December 2012.

He will be sentenced shortly.