Brokers were "tool in my armoury" for ex-trader Hayes, court told

Wed Jun 3, 2015 1:29pm EDT
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By Kirstin Ridley

LONDON (Reuters) - Tom Hayes, the first trader to face a jury trial over alleged Libor rate-rigging offences, told British investigators brokers in other firms became "a tool in my armoury" when they offered to help move rates for him, a London court heard on Wednesday.

The former UBS (UBS.N: Quote) and Citigroup (C.N: Quote) trader, on trial at Southwark Crown Court, also told investigators from Britain's Serious Fraud Office (SFO) that market abuse had been rife and that senior UBS managers must have known what was going on.

UBS bosses including Carsten Kengeter, former co-chief executive of UBS's investment bank, attended at least one morning meeting in Tokyo at which traders commonly discussed Libor rates, and where people wanted them set to flatter trading positions, Hayes told the SFO, the court heard.

"It was too widespread and open for people to be completely unaware ... It was just so blatant," he told investigators during 82 hours of recorded interviews while he was initially co-operating with the SFO in return for admitting wrongdoing, six weeks after his arrest in December 2012.

Hayes also said his ex-line manager Mike Pieri was aware of extra payments he was making to brokers and his network of friends at other banks, in return for information and help, because he said he was "very open about it", the court heard.

Hayes, 35, is charged with eight counts of conspiracy to defraud, a criminal offense that carries a maximum jail sentence of 10 years, between August 2006 and September 2010.

The former yen derivatives trader, who was based in Tokyo until 2010, has pleaded not guilty. His legal team is expected to lay out his defense next month in a trial scheduled to last well into August.

Hayes, described as a highly intelligent and successful trader by prosecutors, told investigators of a culture of heavy drink and drug use in Tokyo during his time there, which he felt at odds with.   Continued...

Former trader Tom Hayes arrives at Southwark Crown Court in London, Britain June 2, 2015. REUTERS/Suzanne Plunkett