Tom Hayes, a 35-year-old trader, has been sentenced to 14 years in prison after becoming the first person to be convicted by a British jury of rigging Libor rates following a trial at London’s Southwark Crown Court.
The jury unanimously found Hayes guilty of eight counts of conspiracy to defraud, after a week of deliberations at the end of a two-month trial.
The Serious Fraud Office argued that Hayes was at the centre of a network of traders at 10 firms that conspired to manipulate the Libor benchmark between 2006 and 2010. Since the scandal was uncovered, more than half a dozen banks have paid billions of pounds in fines and several have fired their chief executives.
During the hearings, Hayes claimed that he only admitted dishonesty during interviews with the Serious Fraud Office in 2012 to avoid extradition to the United States. He reversed his position and pleaded not guilty to eight counts of conspiracy to defraud in December 2013.
Mr Justice Cooke told London’s Southwark Crown Court that the sentence was intended to send a message to the rest of the banking world.
So everyone, you’ve got a banker jailed. Hope you’re all happy now?
But this does raise a very interesting little question. There were two sets of Libor rigging. Firstly, the minor stuff like this, shifting the rate to favour one book or another. And different people doing it too, to favour their own book: some of those attempts at least cancelling each other out. The wider world in general wasn’t very much defrauded by it all.
Then there was the systematic rigging of Libor at the depths of the crash. Recall, Libor is the rate at which a bank says it can borrow in size from other banks. But at that bottom there was no interbank market: no one could borrow in size from a bank. Libor was thus infinite. But it wasn’t reported sa being such: thus it was systematically fiddled.
Who is going to go to jail for that?
If justice were to be done there then there’d be more than a few collars being felt at the BoE and the Fed…..for everyone knew and everyone approved of said manipulation.