A “GREEDY” City trader has become the first person to be jailed for rigging Libor rates in a scandal that shook financial markets.
Tom Hayes, 35, was yesterday handed a 14-year prison term for his role as the “ringmaster” in an enormous fraud to manipulate the benchmark interest rates.
Conduct here is to be marked out as dishonest and wrongJudge Mr Justice Cooke
Sentencing him at London’s Southwark Crown Court, Mr Justice Cooke said: “What this case has shown is the absence of that integrity which ought to characterise banking.”
Hayes, a highly-paid former trader at UBS and Citigroup, orchestrated a scheme to interfere with the rate to boost his own six-figure earnings.
In an audio-clip he said “influencing” Libor was “commonplace” and admitted he was a “serial offender”.
Hayes, from Fleet, Hampshire, was found guilty of eight counts of conspiracy to defraud covering a period from 2006 to 2010, when he worked for UBS and Citigroup.
It took jurors just over a week to reach their verdicts following a two-month trial.
The judge told Hayes: “You played a leading role in the manipulation of Libor.
“You exerted pressure on others, essentially trained those junior to you in the activity, made corrupt payments to brokers for their assistance.
“The conduct involved here is to be marked out as dishonest and wrong, and a message sent to the world of banking accordingly.
“The reputation of Libor is important to the City, as a financial sector, and the banking institutions of this City. Probity and honesty is essential, as is trust.”
A string of banks including Barclays, Lloyds Banking Group, 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 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.”
But the judge said it was no excuse to claim other traders were also manipulating Libor.
He said: “Though the type of activity you were involved in was commonplace and common practice, not considered as wrong by those involved … the fact that others were doing the same as you is no excuse.
“Nor is the fact that your managers saw the benefits of what you were doing and condoned it, embraced it, even encouraged it.”
Hayes’s mother, who was in court for much of the trial, looked tearful as she watched her son being led away His father and wife Sarah were also in court.
Mukul Chawla QC, prosecuting, said Hayes would “cajole”, “beg” and “bribe” brokers through “corrupt” trades to help manipulate Libor.
Hayes built up a network of traders to help him carry out the fraud, even attempting to drag in his younger stepbrother Peter O’Leary. He once offered to pay a contact $100,000 (£60,000) if he kept the Libor rate as low as possible.
Hayes admitted his part but claimed it was not dishonest and his bosses knew what he was doing.