Advertisement

City Trader 'Kept Libor Artificially High'

City Trader 'Kept Libor Artificially High'

A trader encouraged his stepbrother to buy a "few drinks" for his colleague at HSBC in a bid to rig a key interest rate, a court has heard.

The prosecution in the trial of Tom Hayes, 35, also produced an instant message from the defendant to a city trader in which he said "Libor is high because kept it artificially high", as evidence of him deliberately fixing rates.

Jurors at Southwark Crown Court had previously heard that Hayes acted as a "ringmaster" in a massive fraud to manipulate the benchmark lending rate, know as Libor.

The former UBS and Citigroup trader, of Fleet in Hampshire, is on trial for eight counts of conspiracy to defraud between 2006 and 2010, all of which he denies.

Libor is the interest rate banks charge one another and is the basis of trillions of dollars of financial transactions.

The court was shown an email sent to his stepbrother, Peter O'Leary, on 20 April, 2007, in which Hayes wrote: "Do you know the guy who sets yen Libor at your place?"

When Mr O'Leary confirmed that he did, Hayes wrote back: "Mate, can you do me a huge favour and ask him if he'll set his three-month yen Libor on the low side for the next few days as I have one million US dollars of fixes? Would be a massive help, if not don't worry."

Jurors heard the pair had then spoken on the telephone and Hayes encouraged Mr O'Leary to buy his HSBC colleague a "few drinks".

In an audio recording played to the court, Hayes said: "If you got to know him brother, it would be a big help?"

In a second telephone call with Mr O'Leary, Hayes added: "Say, 'do you fancy setting a low yen three-month Libor? It would really help my brother out'."

Three months later, the court was told Hayes urged his stepbrother to ask his HSBC colleague to set the six-month yen Libor "on the high side".

When Mr O'Leary agreed to make the request in a "jovial email", Hayes responded: "Just keep it super casual".

A day later, Hayes told his stepbrother: "I thought about it and I shouldn't have asked you to do that. Sorry mate.

"Don't think I'm going to bother asking for your help on Libor again.

"He probably thought: 'Who's this cheeky young graduate?' As long as you're okay."

The court was also shown the message Hayes had sent to the trader about Libor.

Prosecutor Mukul Chawla QC told the jury: "When he says 'kept it artificially high', that speaks for itself.

"If you needed a clearer example of deliberate rigging of rates, this is it.

"This is strategic, focused. Nothing to do with bank's borrowing rates, all to do with Mr Hayes's trading position."