LONDON (REUTERS) - Tom Hayes, a former trader accused of conspiring to rig benchmark interest rates, abandoned an attempt to coax his step brother into aiding his alleged scam after deciding it was wrong to ask for his help, a London court heard on Wednesday.
On the second day of the world's first jury trial of an individual charged with benchmark rate-rigging offences, Southwark Crown Court was played a recording of a phone call between Hayes, a former UBS and Citigroup trader, and former HSBC trader Peter O'Leary.
Hayes, 35, painted by prosecutors as a ringleader of a conspiracy involving around 25 staff at 10 of the world's largest banks and brokerages to rig rates for profit, asked O'Leary to persuade an HSBC colleague to help lower Libor rates.
"If you get to know him, would be a massive help to me," the court heard Hayes saying.
"Got $1.0 million of risk ... If ... it (the Libor rate) moves by a basis point, for my fix that's worth 125k plus."
But Hayes, diagnosed with a mild form of Asperger's, a form of autism, and who prosecutors said handed the names of alleged accomplices to investigators during 82 hours of interviews, later decided not to lean on family.
"I thought about it and I shouldn't have asked you, sorry mate," Hayes tells O'Leary, his step brother. "It's wrong of me to ask you a favour."
Hayes's trial comes after a seven year, global inquiry that has led to banks and brokerages paying around US$9 billion in fines and sparked an overhaul of how financial benchmarks such as Libor are policed.
Senior lawyer Mukul Chawla, prosecuting for the Serious Fraud Office (SFO), alleged emails and messages, in which Hayes described requests to submit false or misleading rates as"favours", showed clear examples of deliberate rigging and conspiracy.
And he said although the practice might have been rife, that didn't make it acceptable. "Because lots of people are doing it doesn't make it fundamentally honest," he said.
Libor is an average wholesale interest rate used as a benchmark to price an estimated US$450 trillion of financial contracts from derivatives to loans for households and individuals worldwide.
Hayes, a former yen derivatives trader based in Tokyo, is charged with eight counts of conspiracy to defraud between 2006 and 2010, a criminal offence that carries a maximum jail sentence of 10 years. He has pleaded not guilty.
His defence team is expected to lay out its case next week in a trial scheduled to last between 10 and 12 weeks.