Libor fix: First person to stand trial found guilty of conspiracy

LONDON • Former UBS Group and Citigroup trader Tom Hayes, the first person to stand trial for manipulating Libor, was found guilty of eight counts of conspiracy to rig the benchmark rate.

After a week of deliberations, jurors found that the 35-year-old conspired with traders and brokers to dishonestly game the London interbank offered rate to benefit his own trading positions. Each count carries a maximum term of 10 years in prison.

Hayes shook his head as the jury returned their verdict.

Prosecutors said during the nine-week trial that Hayes was the "ringmaster" of a global network of 25 traders and brokers from at least 10 firms who tried to manipulate Libor on an industrial scale. He would bribe, bully, cajole and reward his contacts for their help in skewing the benchmark, used to price more than US$350 trillion (S$480 trillion) of financial contracts from mortgages to credit cards and student loans.

Hayes has been the public face of the global scandal since he was first charged by US officials in 2012. The authorities have levied US$9 billion in fines against banks and brokerages, including a US$1.5 billion penalty for UBS.

Central to the case against Hayes were 82 hours of interviews with Britain's Serious Fraud Office (SFO) in 2013, during which he detailed his methods and even named co-conspirators.

One of the traders he fingered was his step-brother, Peter O'Leary, then a graduate trainee at HSBC Holdings in London.

In the interviews, Hayes coolly explained how the scam started soon after he joined UBS as a yen interest-rate swap trader in Tokyo in the summer of 2006 and continued through to his firing by Citigroup in September 2010.

"I probably deserve to be sitting here because, you know, I made concerted efforts to influence Libor," he said. However, he later had a change of heart and pleaded not guilty.

In court, Hayes called the interviews a "catalogue of mistakes", half-truths and falsehoods. He said he had exaggerated his culpability to avoid extradition to the United States, where he was facing a possible 60-year sentence.

One lawyer said the contradictions between the SFO interviews and the courtroom testimony was one of the keys to the unanimous verdict.

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A version of this article appeared in the print edition of The Straits Times on August 04, 2015, with the headline 'Libor fix: First person to stand trial found guilty of conspiracy'. Print Edition | Subscribe