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Trader 'offered a humongous deal'

Published 28/05/2015

Former UBS and Citygroup trader Tom Hayes faces eight charges of conspiracy to defraud over manipulation of the Libor interbank lending rate
Former UBS and Citygroup trader Tom Hayes faces eight charges of conspiracy to defraud over manipulation of the Libor interbank lending rate

A City trader offered a broker a "humongous deal" as he tried to manipulate a key interest rate which is behind trillions of dollars worth of financial deals, a court has heard.

Tom Hayes, 35, promised to pay his contact up to 100,000 US dollars if he kept the Libor rate "as low as possible", jurors at Southwark Crown Court in London were told.

Prosecutors in his trial claim that Hayes, a former UBS and Citigroup trader, was motivated by "greed" and acted as the "ringmaster" in an enormous fraud to rig the benchmark interest rate.

The court heard that, in a telephone call in 2008, Hayes told a broker: "I don't care right - just get me any f****** trade which pays you basically, mate.

"If you keep fixes unchanged, I'll do a humongous deal with you.

"If you keep it as low as possible, I can do that. I'll, of course, support and pay you ... 50,000 dollars, 100,000 dollars, whatever you want, all right? I'm a man of my word."

Mukul Chawla QC, prosecuting, told the jury that Hayes was becoming an "increasingly dominant force" within his market by May 2008 and he was approached by another bank, Goldman Sachs.

"He was offered quite a lot of money but UBS wanted to hold on to him," the prosecutor told the court.

The jury was shown an email dated June 24 2008 from UBS's head of European trades, Sascha Prinz, to the investment bank's chief executive, Jerker Johansson, which described Hayes as one of his "most talented traders in Tokyo".

"Tom Hayes is being aggressively pursued by Goldman Sachs," he wrote. "They have offered Tom a larger role with significantly more responsibility, plus a 3.2 million dollar guarantee for 2009."

Hayes's bonus at UBS for 2007 was 1.25 million dollars, which was "on the low side of his expectations", Mr Prinz added.

He went on: "I don't believe in guarantees in managing my business ... but I would like to make an exception in this case and offer Tom a target letter with a target of 2.5 million dollars for 2008.

"I believe that, in conjuction with some changes in responsibilities, it would convince him to stay at UBS.

"Throughout this whole process he has behaved utterly professionally."

Hayes was sent a letter from UBS the next day which offered him target-related pay for 2008 of 269 million yen, or £1.29 million, the court heard.

Mr Chawla told the jury: "Because of the financial crisis, Mr Hayes didn't receive anything like that but that was what he was promised ... just under £1.3 million for that year."

The jury has previously been told that Hayes left UBS in September 2009 and joined American bank Citigroup, where he earned around £3.5 million for just nine months' work in 2010.

Hayes, of Fleet, Hampshire, denies eight counts of conspiracy to defraud over a period from 2006 to 2010.

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