First City trader convicted over Libor is jailed for 14 years

A city trader has been jailed for 14 years for his involvement in rigging interest rates.

Tom Hayes is the first to be found guilty of manipulating the Libor rate, an international interest rate benchmark.

ITV News' Rebecca Barry reports from Southwark crown Court:

The two banks, where Tom Hayes worked while he was rigging Libor rates, have made the following statements, after he was sentenced to 14 years in prison for conspiracy to defraud.

Hayes was employed at UBS from August 2006 to December 2009, and at Citigroup from December 2009 to September 2010.

• Read: City trader is first to be convicted over Libor scandal

Libor rate-rigging was a practice that proved costly for a number of banks when the extent of the scandal emerged in the wake of the 2007 and 2008 financial crisis.

• Read: City trader Tom Hayes jailed for 14 years over Libor scandal

Much of the money paid in fines in the UK has been allocated to charities.

In the wake of the Libor rigging scandal, there has been a renewed focus on the practices of the financial markets.

A review in September 2012 found that manipulation of the way Libor was fixed had damaged trust in the financial system and called for urgent reforms.

The role of the British Bankers' Association in overseeing Libor was severely criticised and responsibility for it was handed to America's Intercontinental Exchange Benchmark Administration this year.

Rules published in 2013 laid out new requirements for checking banks' submissions and monitoring for suspicious activity by benchmark administrators, as well as the policy on handling conflicts of interest.

In June, Bank of England governor Mark Carney backed plans laid out by the Fair and Effective Markets Review for the lengthening of the maximum sentence for market abuse from seven to 10 years.

A number of banks including Barclays, Lloyds Banking Group, the Royal Bank of Scotland and Deutsche Bank have been fined billions of pounds for their part in the Libor rigging scandal. But what exactly is the rate that was manipulated?

• Libor - or The London Interbank Offered Rate - is a benchmark that indicates the interest rate that banks charge when lending to each other.
• Each day, a panel of banks set out what rates they think they can borrow from others over a range of periods - from overnight up to 12 months.
• The data is collated, the top and bottom estimates are removed and the rest are then averaged to give a final figure.
• It is used as the basis for hundreds of trillions of dollars of loans and transactions around the world from complex derivatives to mortgages.
• Libor is seen as fundamental to the operation of UK and world markets.

Tom Hayes, who has been sentenced to 14 years in prison for manipulating Libor rates, built up a network of traders to help him carry out the fraud, the prosecution said.

Hayes was said to have once offered to pay a contact 100,000 US dollars if he kept the Libor rate as low as possible.

Mukul Chawla QC,prosecuting, said: "On an almost daily basis he set out to dishonestly manipulate or rig Libor at his bank and other banks."

"The motive was a simple one: it was greed", he added.

• Read: City trader is first to be convicted over Libor scandal

Former UBS and Citigroup trader Tom Hayes has been sentenced to 14 years in jail after a jury found him guilty verdict on eight counts of conspiracy to defraud for rigging Libor rates.

A trader, convicted over the Libor scandal, was paid £1.3m before tax in salary and incentives by UBS from September 2006 to December 2009.

Tom Hayes then joined Citigroup in 2009 because he "felt that UBS were not paying him enough", and received £3.5 million before tax for just nine months' work.

The prosecutor in his trial said Hayes immediately set about rigging Libor sending a message on his first day trading, saying: "Do me a favour and get the Libor rate up?".

Hayes was sacked from the bank after his methods were formally reported to senior management. He was later arrested in the UK in December 2012.

City trader Tom Hayes is now facing a prison sentence after becoming the first person to be convicted of rigging Libor rates.

During his trial, prosecutors said the banker, who has mild autism, and is a fan of Superman bedding, was a "ringmaster" who would "cajole" and "bribe" brokers into manipulating the rate.

As a trader in yen Libor derivatives, he bet on movements of the daily rate banks are able to borrow from each other.

He admitted making "requests" concerning the Libor rate, but insisted lots of bankers were doing the same, and "no one batted an eyelid".

Hayes had denied eight counts of conspiracy to defraud when he worked for Switzerland's UBS and America's Citigroup but a jury found him guilty of all counts.

A City trader has become the first person to be convicted of rigging Libor rates in a scandal that shook financial markets.

Tom Hayes, 35, was the "ringmaster" in an enormous fraud to manipulate the benchmark interest rates.

The highly-paid ex-trader at UBS and Citigroup orchestrated a scheme in order to boost his own six-figure earnings, London's Southwark Crown Court heard.

In an audio clip he said "influencing" Libor was "commonplace" and admitted being a "serial offender".

He denied eight charges of conspiracy to defraud when he worked for Switzerland's UBS and America's Citigroup but a jury found him guilty on all counts.