Ex-UBS and Citigroup Trader Gets 14 Years in Prison for Libor Rigging

A jury in London has found Tom Hayes, a former trader at Citigroup (C) and UBS (UBS), guilty of multiple counts of conspiring to rig the London interbank offered rate. He was sentenced to 14 years in prison.

Prosecutors accused him of heading up the scam to manipulate the yen Libor. They said that he asked rate setters and traders at UBS and other banks, as well as outside brokers, to manipulate the rate so that his trading positions would benefit. He also is accused of giving brokers incentives to help him get other banks to rig the rate.

Hayes had defended himself, arguing that he acted in line with industry standards and did not think his conduct was improper. He claims that his superiors knew about his activities.

Hayes was considered one of the top traders internationally. He made hundreds of millions of dollars in revenue for UBS by trading interest-rate swaps. After going to Citigroup, he was fired in 2010 for rigging Libor. While he initially denied wrongdoing, he eventually entered into an agreement to plead guilty. As part of that deal he was to testify against alleged co-collaborators.

Later, Hayes said the only reason that he pleaded guilty was because he didn’t want to be extradited to the United States where he faced similar criminal charges and up to 30 years behind bars if convicted. British law prevents a defendant from being extradited if he has been charged with similar offenses in the country. He pleaded not guilty to the charges filed in the U.K.

If Hayes had stayed with his original guilty plea he likely would have gotten off with a lighter sentence. Following Haye’s conviction and sentencing, the U.K.’s Serious Fraud Office announced plans to file criminal charges against other ex-bankers for Libor rigging. Already, there are 11 other men waiting for their London trials for their alleged involvement. Another British banker pled guilty to charges.

Libor scandal trader Tom Hayes jailed for 14 years, CNN Money, August 3, 2015

SFO chief says more Libor charges on the way after Tom Hayes conviction, The Guardian, August 4, 2015

Serious Fraud Office