I wanted every bit of money you could get, said trader accused of Libor fixing

The Times Harry Wilson City Editor

A “greedy” City trader accused of masterminding a huge interest-rate rigging scandal boasted about wanting “every little bit of money you can possibly get”, a court was told yesterday.

Tom Hayes arrives with his wife, Sarah, at Southwark Crown Court

Tom Hayes arrives with his wife, Sarah, at Southwark Crown Court
  • Court sketch

    The prosecution said that at one point a third of the trading commissions Mr Hayes was paying were bribes to brokers Steve Maisey

Jurors at the first trial of a banker alleged to have played a central role in Libor-fixing were told that Tom Hayes, a former trader at UBS and Citigroup, had “dishonestly” attempted to move borrowing rates to inflate his own pay in a criminal conspiracy involving other banks.

Mukul Chawla, QC, for the prosecution, said that Mr Hayes, 35, had “elevated the dishonest manipulation of Libor to new heights”, using what he described as a web of contacts at other banks and brokers to do his bidding in return for kickbacks.

“Mr Hayes was the essential player. He was the ringmaster at the very centre telling other people what to do and getting them to do what he wanted . . . rewarding them when they helped him,” Mr Chawla said.

A jury at Southwark crown court in London was told that Mr Hayes had admitted in an interview with the Serious Fraud Office to being a serial offender. In an audio recording played to the court, Mr Hayes said: “I probably deserve to be sitting here because, I made concerted efforts to influence Libor . . . ultimately I was someone who was a serial offender within Libor.”

Mr Chawla said: “All bankers want to maximise their profits, but Mr Hayes did it in a wholly dishonest way, concerned wholly with his profits and wholly unconcerned by the fact that he was cheating those with whom he was trading. In his own words, he was greedy.”

Mr Hayes, who was arrested in 2013, was said to have told investigators: “The point is, you are greedy, you want every little bit of money you can possibly get . . . that’s how you are judged, that’s your performance metric.”

Prosecutors said that while working in Tokyo for UBS and then Citigroup, Mr Hayes had co-opted several brokers and even staff at rival banks to help him to raise and lower yen borrowing rates to boost his profits.

In a recording of a call with a broker, who cannot be named for legal reasons, Mr Hayes allegedly discussed arrangements to hand over what the prosecution said was a “kickback” in return for helping to manipulate Japanese rates.

Prosecutors said that Mr Hayes had used “wash trades”, a financially purposeless deal, to allow him pay commissions to his accomplices without arousing the suspicion of his superiors. In one example shown to the court, Mr Hayes and a trader at another bank paid more than £35,000 in commissions to a broking firm for what Mr Chawla said were “utterly pointless and corrupt trades”. The prosecutor said at one point more than a third of the trading commissions paid by Mr Hayes were bribes to brokers.

An expletive-ridden phone call between Mr Hayes and one broker was cited as evidence of the lengths he would go to to get other banks to alter their Libor submissions. “This is f***ing ridiculous,” he said as he made clear his frustration that some banks were failing to do what he wanted.

“[Mr Hayes would] ask them, cajole them and even beg them to carry out his wishes,” Mr Chawla said.

Over the three years he worked for UBS, Mr Hayes was paid £1.3 million in salary and bonuses. His earnings rocketed when he joined Citigroup, where he was paid £3.5 million in nine months before he was sacked by the US bank for allegedly attempting to rig Libor.

The trial of Mr Hayes is a major test of the SFO’s attempt to justify its existence after a series of embarrassing bungles. The trial is expected to last ten weeks and is the first of three in which a further 12 bank employees and brokers will face criminal charges.

According to his defence team, Mr Hayes has a mild form of Asperger’s syndrome and is expected to spend the first part of the trial sitting next to his solicitor and a specialist “intermediary”.

US prosecutors had wanted to try Mr Hayes in an American court and had gone as far as charging him. However, David Green, the director-general of the SFO, fought an acrimonious turf war with the US authorities to ensure that the trial took place in the UK.

The former UBS and Citigroup trader denies eight counts of conspiracy to defraud from 2006-10.

The trial continues.

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