UBS Gave Out ‘Instruction Manual on Fixing Libor,’ Hayes Said

Thomas Hayes
Former Trader Thomas Hayes. Photographer: Simon Dawson/Bloomberg

Thomas Hayes, a former trader on trial over charges he manipulated benchmark rates, told prosecutors in 2013 that UBS Group AG distributed “an instruction manual on fixing Libor” to suit their trading positions.

The Swiss bank’s e-mailed “Guide to Publishing Libor Rates,” which was shown to jurors by prosecutors in London Thursday, included an instruction for traders to adjust their submissions depending on their “delta/fixing position.”

“If 3m Libor” exposure “is 4,125 this means we are receiving” and “therefore we want to increase the fixing by 25 basis points,” according to the internal UBS guide. “If the number is negative then vice-versa.”

Hayes, the first person to stand trial for allegedly manipulating the London interbank offered rate, told prosecutors the document was evidence that Libor-rigging was standard operating procedure during his time at UBS.

The problem was exacerbated because the managers who oversaw Libor submissions also had large trading positions based on the benchmark, Hayes added.

“This is where what UBS is doing in terms of throwing individuals under the bus is really wrong,” Hayes told the Serious Fraud Office in 2013.

Hayes worked at UBS from 2006 to the end of 2009 before moving to Citigroup Inc. The 35-year-old is accused of eight counts of conspiracy to manipulate Libor, a benchmark for financial products worldwide.

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