Britain's fraud prosecutor on Tuesday charged former UBS and Citigroup trader Tom Hayes with eight counts of conspiracy to defraud as it laid the groundwork for what could be the first Libor trial. Hayes, 33, was arrested by London police and the Serious Fraud Office (SFO) last December as part of a global investigation, spanning North America, Europe and Japan, into the manipulation of benchmark interest rates.
Libor, the London interbank offered rate, is a crucial benchmark affecting hundreds of trillions of dollars of mortgages and other loans world-wide. So far, US and UK regulators have fined three banks, including Switzerland's UBS, a total $2.6 billion for their role in the scandal. The UK criminal charges will allow the SFO to stake a jurisdictional claim on Hayes, a Briton who has faced possible extradition since being charged by US prosecutors last year.
One day after his arrest on December 11, the US Department of Justice lodged sealed charges of conspiracy, wire fraud and an antitrust violation against Hayes. The SFO on Tuesday said Hayes would appear before Westminster Magistrates' Court in London at 10 am (0900 GMT) on Thursday, where his charges will be detailed and read out in open court. His case will then transfer to a higher crown court, where, if he does not plead guilty, it is expected to be heard in front of a jury.
"It all turns on his plea," a senior lawyer said. Hayes lawyer was not available to comment. UBS and Citigroup also declined to comment. Hayes was 27 when he joined Swiss bank UBS in Tokyo in 2006, becoming a senior and highly-valued trader of interest-rate derivatives indexed to yen-denominated Libor. In late 2009, he left UBS to join Citigroup. He left Citigroup less than a year later. Hayes could be extradited to the United States and prosecuted there after any UK trial if the charges were sufficiently different, lawyers said.
Comments
Comments are closed.