Former trader first to be prosecuted over Libor ‘fixing’

The former trader on trial for allegedly conspiring to rig benchmark interest rates, has admitted to being motivated by greed and was fired by US bank Citigroup in 2010, the prosecution told a London court yesterday.

Tom Hayes is the first person to be prosecuted over manipulation of the London interbank offered rate (Libor) after a seven-year, global inquiry that has seen banks and brokerages pay around $9bn (€8.27bn) in fines and sparked an overhaul of how financial benchmarks such as Libor are policed.

Opening the case for the prosecuting Serious Fraud Office (SFO), senior lawyer Mukul Chawla told the court that Mr Hayes, 35, was at the epicentre of a conspiracy to rig Libor interest rates and admitted during 82 hours of interviews with prosecutors that he had put his trading book and pay above other concerns.

The former yen derivatives trader 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 and his defence team has yet to respond to the allegations in court.

The trial is expected to last 10-12 weeks.

Mr Hayes, who has mild Asperger’s, was given leave to sit with his solicitor, so he could more easily instruct his legal team. He sat making notes and occasionally shook his head and frowned at comments by the prosecutor.

The SFO alleges Mr Hayes was a central figure in a conspiracy with staff from at least 10 banks and brokers to rig Libor —- an average interest rate used to price an estimated $450tn of financial contracts from derivatives to loans for households and individuals worldwide.

Prosecutors allege Mr Hayes conspired with others to request or make false or misleading submissions to benefit his own trading book, deliberately disregarding the proper basis for making submissions and prejudicing the economic interest of others.

A number of people listed in the indictment had been charged with offences and were awaiting trial. But Mr Chawla said Mr Hayes stood alone in court because “his actions stood apart from and above all others”.