LONDON (Reuters) - Tom Hayes, the first trader convicted by a jury of manipulating Libor benchmark interest rates, on Tuesday begins a two-day, appeal against his conviction and a 14-year jail sentence, one of the toughest to date for white collar crime.
The London case is being heard by Lord Chief Justice John Thomas — the head of the judiciary in England and Wales — Brian Leveson, a senior judge who chaired a public inquiry into the ethics of the British media in 2012, and Elizabeth Gloster.
Hayes, a 36-year-old former UBS and Citigroup trader, was in August found unanimously guilty of eight charges of conspiracy to defraud for rigging Libor, the London interbank offered rate, that underpins around $450 trillion of financial contracts and consumer loans worldwide.
Cast as the ringleader in one of the rate-rigging scams that has cost banks billions in regulatory fines, Hayes was found guilty of conspiring to rig Libor for profit.
But his legal team is arguing that High Court Judge Jeremy Cooke made legal errors in the way he handled the trial and that the sentence is wrong in principle and excessive.
Much of the initial argument is expected to focus on what evidence was deemed relevant or admissible during the trial, lawyers say. The arguments about sentence length are likely to rest in part on whether Cooke was right to jail Hayes for consecutive, rather than concurrent, fraud offences.
Richard Cornthwaite, Hayes’s lawyer at law firm Cartwright King, said he expected a ruling this week but added that this was “a matter for the court” .
Hayes, who has Asperger’s Syndrome, denied dishonesty during his trial, arguing he had been open about practices that were endorsed by senior staff and common in the industry at the time.
Hayes’s defense was hampered by his earlier admissions of dishonesty in interviews with investigators in 2013. Hayes told the jury he initially cooperated with the Serious Fraud Office only to avoid extradition to the United States, where he faced similar charges. But he later decided to fight the charges.
In his sentencing remarks on Aug. 3, Cooke said there was no separate standard of dishonesty for any group of society, that Hayes had “appreciated at the time” he had acted dishonestly and that it was irrelevant that others had done the same or that managers condoned, embraced or even encouraged it.
He said there was “no doubt” the sums involved ran into millions of dollars and that the conduct in the case “must be marked out as dishonest and wrong and a message sent to the world of banking accordingly”.
Hayes was sentenced consecutively for the conspiracies he was found guilty of while at UBS and those while at Citigroup between 2006 and 2010. Had the market rigging been seen as one offence, Hayes would have faced a maximum 10-year sentence.
The sentence shows how the UK judiciary is toughening its stance on white collar crime, lawyers say.
Should the Court of Appeal side with Hayes, it could order a retrial. But both Hayes’s team and the Serious Fraud Office, which is now pursuing confiscation proceedings against Hayes to claw back property deemed to be proceeds of crime, could yet take the case to the Supreme Court if they fail at this stage.
Reporting by Kirstin Ridley; Editing by Keith Weir