The Times Harry Wilson City Editor
“This decision will send a chill down the spines of the other traders charged with conspiracy to defraud in relation to benchmark manipulation and senior managers within banks who are alleged to have been complicit in this activity,” said Stevie Loughrey, a financial services litigation lawyer at Carter Ruck, the law firm.
“A double digit sentence for a ‘City’ fraud is almost unheard of,” Richard Burger at RPC, another law firm, said.
For Hayes, who relied on legal aid to fight the case, the sentence could be just the start of his problems, with prosecutors expected to go after what money he has left. “If he has sizeable assets then they will be attractive for a seizure order,” Simon Morris, at CMS, said.
The 13 people who have been charged by the Serious Fraud Office in relation to Libor-rigging include six brokers who will face trial next month over allegations they helped Hayes to manipulate Japanese borrowing rates.
However, lawyers said that the Hayes case could mark the low-hanging fruit for fraud busters and that future cases might prove more difficult to win.
“The more an individual was encouraged by all around them to pick a particular rate, the less likely it is that they will have perceived it as dishonest. This has already led to at least one banker for whom we recently acted before the Financial Conduct Authority [the City watchdog] being cleared of wrongdoing,” said Ben Rose, a partner at Hickman & Rose.
With such a long sentence it seems probable that Hayes’s legal team will appeal.
For the time being, though, the Hayes guilty verdict provides a much needed win for the SFO, which has had its future questioned openly.
Theresa May, the home secretary, suggested last year that the agency could be disbanded. The millions of pounds and more than 100 staff it dedicated to the Libor investigation now look justified.
David Green, the director of the SFO, said that Hayes’s conviction ended one strand of the Libor investigation. “One senior banker previously pleaded guilty and another 11 individuals await their trial,” he said.
Crimes and Punishment
Julian Rifat — Hedge fund trader given 19 months for insider trading
Kweku Adoboli, — UBS trader handed seven years for £1.5 billion trading fraud
Christian Littlewood — Dresdner Kleinwort banker given three years, four months for insider trading
Gerrard Gandy — plotted to sell cocaine and ecstasy worth £12 million
Peter Guy — fatally shot his partner’s son-in-law