Thomas Hayes

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Thomas Hayes
Occupation Former UBS trader

Tom Hayes is one of two former UBS traders charged by U.S. prosecutors with manipulating global interest rates. He was charged with wire fraud and price-fixing related to the yen Libor. The U.S. Department of Justice said he colluded with brokers, colleagues, and counterparts at other firms to manipulate the rate. According to the CFTC, Hayes was “widely considered the dominant trader in the Tokyo yen swaps market because he traded in enormous volumes and accepted large trading risks." [1] He was reportedly so brainy yet socially awkward that colleagues nicknamed him “Rain Man.” Hayes is the first person to face trial by jury over allegations of conspiring to rig Libor rates, a scandal which cost banks billions of dollars in fines from regulators.

Hayes traded in yen-denominated derivatives tied to Libor. Small movements in the rate could affect his profit and loss, although he has also said the effect of Libor rates on his trades was relatively small.

In July of 2015 Hayes was put on trial in a London court and pleaded not guilty to eight counts of conspiracy to defraud between 2006 and 2010. He said he had been open about trying to influence rates, that his managers knew what he was doing and that the practice was widespread in the industry.[2] Before he first took the stand in London, the judge, Jeremy Cooke, said that the former trader had been diagnosed with Asperger’s Syndrome. Hayes testified that he had not conspired dishonestly to manipulate Libor.[3]

The jury was shown an e-mail during the trial in which an interdealer broker asked Hayes whether Libor fixings were manipulated. "Yes of course they are," Hayes reportedly said in the e-mail. "Just give the cash desk a Mars bar and they’ll do whatever you want.”

In August 2015, Hayes was convicted of fraudulently trying to rig the Libor, the first criminal conviction of an individual for manipulating the benchmark. He was sentenced to 14 years in jail, one of the longest sentences handed down for white collar crime.[4] He had faced up to 10 years for each of the eight counts he was charged with.[5]

In December of 2015 Hayes won a reduction of his prison sentence Monday from 14 to 11 years but failed in an appeal to overturn his conviction.[6]

Background

Hayes joined UBS in 2006 and worked there until 2009, when he joined Citigroup Inc. Citigroup fired him less than a year after hiring him, in the course of an internal probe it undertook when another employee raised concerns he was making inappropriate requests about Libor submissions, according to MarketWatch.[7] He worked at Edinburgh-based Royal Bank of Scotland Group Plc from 2001 to 2003.

At UBS, Hayes was known as a star trader.[8] He made nearly $260 million for the bank in the three years he worked there.

Education

Hayes has an MBA from Hult International Business School. [9]

References

  1. UBS Trader Hayes Exposed at Core of Libor Investigation. Bloomberg.
  2. Former trader Hayes ignored 2009 warning, Libor trial hears. Reuters.
  3. Hayes Said Traders Would Help Rig Libor for a Mars Bar. Bloomberg.
  4. Appeal court asks for new medical report on jailed Libor trader. Reuters.
  5. Former Trader Tom Hayes Sentenced to 14 Years for Libor Rigging. The Wall Street Journal.
  6. Former Trader Tom Hayes Gets Prison Sentence Cut to 11 Years. The Wall Street Journal.
  7. ‘Rain Man’ claims Libor scandal ‘goes much higher’. MarketWatch.
  8. UBS Admits Rigging Rates in 'Epic' Plot. The Wall Street Journal.
  9. How much was UBS Libor trader Tom Hayes paid?. eFinancialCareers.