Former trader Hayes ignored 2009 warning, Libor trial hears

Wed Jul 8, 2015 3:10pm EDT
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By Kirstin Ridley

LONDON (Reuters) - Tom Hayes, the former trader on trial on Libor interest rate rigging charges, told a London court on Wednesday he ignored a 2009 warning to stop trying to influence rates in part because he was pre-occupied with moving jobs.

Prosecutors allege Hayes, a former star trader at UBS UBSG.VX and Citigroup (C.N: Quote), set up a network of brokers and traders that spanned some of the world's most powerful financial institutions to rig Libor for profit, cheating counterparties.

Hayes has pleaded not guilty to eight counts of conspiracy to defraud between 2006 and 2010, saying he was open about trying to influence rates, that his managers knew what he was doing and that the practice was widespread in the industry.

Libor, a benchmark used to price trillions of dollars of financial products, is an average interest rate calculated from submissions by banks, and so influencing submissions could affect the eventual outcome.

On his second day in the witness box at Southwark Crown Court, Hayes said his UBS boss, Mike Pieri, telephoned him in August 2009 to warn him against sending emails to try to influence UBS's own Libor rate submission. 

Hayes, 35, said he was surprised by the request, but interpreted it as meaning: "carry on doing it but don't send any emails".

A UBS spokeswoman said Pieri had no comment on the matter.

Hayes told the court this was the only warning he received at UBS that what he was doing might be wrong, and that he was caught up at the time in the emotional turmoil of leaving the bank, where he had worked for the previous three years in Tokyo.   Continued...

Former trader Tom Hayes leaves Southwark Crown Court in London, Britain July 7, 2015. REUTERS/Neil Hall