SFO bags LIBOR trader

The Serious Fraud Office (SFO) has secured a “much needed win” with the conviction of Tom Hayes for LIBOR fraud.

Hayes was convicted by a jury of eight counts of conspiracy to defraud, at Southwark Crown Court this week. The former City trader had rigged global LIBOR interest rates through a network of brokers and traders at several financial institutions while working at UBS and Citigroup. The practice was apparently widespread at the time. Hayes initially co-operated with investigators but later changed his plea to not guilty.

Sentencing Hayes to 14 years in prison, Mr Justice Cooke said: “The seriousness of this offence in the context of the LIBOR benchmark and banking is hard to overstate.

“You succumbed to the temptation…[for] status, seniority and remuneration, particularly by way of bonus.”

Elly Proudlock, counsel at WilmerHale, says the SFO has “staked its reputation on the LIBOR cases and will be bolstered by this result”.

Simon Duncan, solicitor at Moon Beever, says: “The sentence reflects the seriousness of engineering a conspiracy to defraud market users and such a long sentence for financial crimes is overdue.

“This sends a clear signal to those involved in the manipulation of LIBOR that such conduct is not acceptable and it will have consequences. Given the number of co-conspirators, I would expect to see more prison sentences handed down in due course.

“In the end, bank employees can be expected to learn that the financial markets are not unregulated casinos where such conduct will go unchallenged.”