Trader jailed over LIBOR manipulation
04 August 2015 London
Image: Shutterstock
The first person to be charged as part of the investigation in to LIBOR manipulation has been found guilty on eight counts of conspiracy to defraud and sentenced to 14 years in prison.
Former derivatives trader Tom Hayes was investigated under the Serious Fraud Office’s (SFO’s) investigation, and found to have made submissions of rates to the Yen LIBOR submissions that were false or misleading, thereby altering the economic interests of others.
The London inter-bank offered rate (LIBOR) is used as the global benchmark interest rate and underpins investments and contracts around the world.
Southwark Crown Court heard that Hayes repeatedly asked rival brokers and traders, and submitters to his own banks, to alter yen LIBOR submissions, and sometimes offered a reward in return.
The offences occurred between August 2006 and December 2009 when Hayes worked at UBS, and between December 2009 and September 2010 when he was employed at Citigroup.
Citi issued a statement saying: "Tom Hayes was terminated in September 2010 following an incident that was reported to compliance. Citi also reported the matter to the appropriate regulators at the time."
UBS also responded to the decision, 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.”
David Green, director of the serious fraud office, said: "The jury were sure that in his admitted manipulation of LIBOR, Hayes was indeed dishonest. The verdicts underline the point that bankers are subject to the same standards of honesty as the rest of us.”
"This brings to an end one strand of the SFO's continuing Libor investigation. One senior banker previously pleaded guilty and another 11 individuals await their trial."
Justice Jeremy Cooke, who oversaw the proceedings, said: "The seriousness of the offence is hard to overstate… A message has been sent out to the world of banking accordingly [that] probity and honesty are essential."
Former derivatives trader Tom Hayes was investigated under the Serious Fraud Office’s (SFO’s) investigation, and found to have made submissions of rates to the Yen LIBOR submissions that were false or misleading, thereby altering the economic interests of others.
The London inter-bank offered rate (LIBOR) is used as the global benchmark interest rate and underpins investments and contracts around the world.
Southwark Crown Court heard that Hayes repeatedly asked rival brokers and traders, and submitters to his own banks, to alter yen LIBOR submissions, and sometimes offered a reward in return.
The offences occurred between August 2006 and December 2009 when Hayes worked at UBS, and between December 2009 and September 2010 when he was employed at Citigroup.
Citi issued a statement saying: "Tom Hayes was terminated in September 2010 following an incident that was reported to compliance. Citi also reported the matter to the appropriate regulators at the time."
UBS also responded to the decision, 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.”
David Green, director of the serious fraud office, said: "The jury were sure that in his admitted manipulation of LIBOR, Hayes was indeed dishonest. The verdicts underline the point that bankers are subject to the same standards of honesty as the rest of us.”
"This brings to an end one strand of the SFO's continuing Libor investigation. One senior banker previously pleaded guilty and another 11 individuals await their trial."
Justice Jeremy Cooke, who oversaw the proceedings, said: "The seriousness of the offence is hard to overstate… A message has been sent out to the world of banking accordingly [that] probity and honesty are essential."
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