Tom Hayes, the manipulator behind LIBOR

Tom Hayes, the former star trader at UBS, had been charged against manipulating one of the most important market measurements in the world—the interest-rate benchmark Libor. Hayes specialized in trading interest rate swaps in trillions of dollars, and his P&L relied heavily on the movement of Yen LIBOR. Only one basis point would win or cost him one million dollars. To secure his profits, Hayes somehow found out that LIBOR is determined by the daily discussion between 16 banks, and each bank would offer suggestions of interest rate based on an email sent by interdealer brokers. In order to control the timing and direction of the interest rate swing, Hayes would leverage his network to the extent where he could find and eventually bribe the brokers who could suggest LIBOR in the email to his favor. In August, Hayes was sentenced 14 years in jail — the longest handed down in Britain for financial fraud.

In the previous trial, he judge said in his closing remarks, “What this case has shown is the absence of that integrity which ought to characterize banking.” Now Hayes, the 35-year-old former yen derivatives trader, is seeking to appeal against his 14-year prison sentence. Hayes testified he was trying to do his job well and did everything with the knowledge of his superiors at UBS. Hayes testified he was trying to do his job well and did everything with the knowledge of his superiors at UBS. If permission is granted for his appeal, Hayes’ case will be heard by judges at the Criminal Court of Appeal.

  • Miranda Wang