UK trader at centre of Libor scandal loses appeal
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The news: Tom Hayes, the London trader at the centre of a conspiracy to rig interest rates during the 2008-2009 financial crisis, has lost his appeal of a 2015 conviction which found him guilty of trying to manipulate the London interbank offered rate (Libor).
The numbers: As part of the appeal, Hayes sought to recoup a substantial amount of the £900,000 ($1.74 million) in personal wealth he lost as a result of penalties tied to the case, that the government had argued were the proceeds of crime. By 2017, twelve banks had paid roughly USD10 billion in penalties related to the fraudulent Libor activities.
The context: Prosecutors alleged that Hayes and a number of other bankers manipulated the key interest rate benchmark which is used to value over USD350 trillion worth of loans and securities contracts. Libor was used to set the rates at which banks would lend to each other, and has been phased out of use over the past couple of years.
At the 2015 trial, Hayes said his behaviour was considered the norm in the industry, stating: “Not even Mother Teresa wouldn’t manipulate Libor if she was setting it and trading it.”
The Court of Appeal heard Hayes’ case alongside ex-Barclays trader Carl Palombo, who had been convicted of manipulating Euribor (a similar benchmark rate). Palombo’s case was also dismissed.
The sources: UK Court of Appeal Judgment, Wall Street Journal
