Guilty

“Rain Man” Trader Convicted to 14 Years in Prison for LIBOR Rigging

Trader Tom Hayes got a hefty prison sentence for actively participating in the manipulation of the Japanese yen LIBOR rate

One of the traders who actively participated in the manipulation of the Japanese yen LIBOR rate was sentenced to 14 years in prison. While working at UBS Group AG and Citigroup Inc. Mr Tom Hayes had been engaging in illegal activity while attempting to “fix” the benchmark borrowing rate.

The verdict was unanimous despite Mr. Hayes’ surprising non-guilty plea.

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The trader was arrested by the City of London police and the Serious Fraud Office (SFO) in December 2012 after evidence of his involvement in the Japanese yen LIBOR rate manipulation was found.

Nicknamed by his fellow colleagues as “Rain Man” similar to a movie character suffering from autism, Mr. Hayes was allegedly one of the leading figures in a conspiracy to manipulate global benchmarks involving a web of 25 traders and brokers from about 10 companies.

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Mr. Hayes is the first person to be convicted in similar charges and has received the largest prison sentence in the history of financial crime in the U.K.

After facing the prospect of an extradition to the U.S., the conspirator decided to cooperate fully with the U.K. authorities and admitted to wrongdoing. He also stated that the practice in which he had been engaged in was widespread across all the banks.

Later on Mr. Hayes pleaded not guilty much to the surprise of the SFO officers. His defense took the stance that the trader had over-extended himself in his testimony to the U.K. authorities due to being pressured to face up to 90 years in prison as per U.S. laws.

Mr. Hayes subsequently denied that he had acted dishonestly while acting to manipulate the Japanese yen LIBOR rate. Apparently the jury at the Southwark crown court was not convinced.

During his career, the trader generated massive amounts of profits for the institutions where he worked. At UBS he managed to cash in $260 million for the bank in three years. After moving to Citigroup in 2010, Hayes got sacked after a colleague of his alerted management about the methods which the former UBS trader used.

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