London banker Tom Hayes sentenced to prison over Libor fixing
04 August 2015
London banker, Tom Hayes, has been found guilty of all eight counts of conspiracy to manipulate the London interbank offered rate. Hayes, who worked at UBS and Citigroup, was sentenced to 14 years in prison yesterday following week long deliberations by the jury.
According to his lawyers, he acted like his peers and with the full knowledge of employers who never tried to stop him.
Lawyers for former traders Kweku Adoboli and Jerome Kerviel had advanced the same arguments, but the two were convicted for multi-billion dollar losses at UBS Group AG and Societe Generale SA. They claimed their bosses were fully aware of their conduct. According to commentators, the failure of the defence in the Hayes trial re-confirmed the move toward greater individual accountability in the industry after the financial crisis.
''In this new era of banking, personal responsibility can no longer be absolved with an 'everyone did it' attitude,'' said Richard Burger, a lawyer at RPC LLP in London, Bloomberg reported. ''This verdict is a signal that there but for the grace of God could go any trader, banker, or senior manager if the prosecutor has the bit between its teeth.''
Following his arrest by the UK Serious Fraud Office in 2012, Hayes under a deal with the agency to plead guilty, told the SFO in 82 hours of interviews that the he had ''made concerted efforts to influence Libor'' and was a ''serial offender.''
Meanwhile, in an editorial, The Independent pointed out that Hayes had become the first banker to be convicted by a jury and jailed for one of the scandals that emerged from the detritus of the financial crisis.
According to The Independent, the conviction would be seen in many quarters as a cause for celebration - especially at the SFO, whose very future of was, in a way, at stake when it started prosecution of a man ''portrayed as the kingpin behind a global conspiracy to defraud through manipulation of Libor interest rates.''
Politicians would quickly point to the case as evidence that the system worked, while the banking industry would be happy, the public had a fall guy.
The Nuremberg defence - Hayes was only doing what everyone else was doing and was quite open about it, even to the extent of posting on Facebook had been rejected. The jury looked at whether Hayes had been dishonest by the standards of reasonable, honest members of society. But what were his managers too not guilty, who, far from reprimanding him, chose to reward him?