Bank Traders, Brokers Worked With Hayes on Libor

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Tom Hayes, the former UBS AG and Citigroup Inc. trader, conspired with employees of at least five other banks and three interdealer brokers over a four-year period to manipulate yen Libor rates, prosecutors said.

Hayes appeared at a London criminal court for the first time today where prosecutors laid out the charges against him. The 33-year-old was charged with working with employees at JPMorgan Chase & Co., Royal Bank of Scotland Group Plc, HSBC Holdings Plc, Rabobank Groep and Deutsche Bank AG, as well as Tullett Prebon Plc, ICAP Plc and RP Martin Holdings Ltd., the U.K. Serious Fraud Office said in documents read out today.

The charges come almost a year after Barclays Plc became the first of three banks fined as part of global regulators’ probes into the London interbank offered rate and other benchmarks. Hayes has also been charged by the U.S. Justice Department, which is running a parallel criminal investigation.

Hayes tried to manipulate rates “with the intention that the economic interests of others would be prejudiced and/or to make personal gain for themselves or another,” U.K. prosecutors said in the indictment today.

Hayes faces eight counts of conspiracy to defraud in the case, four covering the period from Aug. 8, 2006, until Dec. 3, 2009, while he worked at UBS, and the other four from Dec. 1, 2009 until Sept. 7, 2010, when he was at Citigroup.

Blue Shirt

Hayes, wearing an untucked, blue, button-down shirt with the sleeves rolled up, spoke only to say his name, address in Surrey, England, and date of birth. His lawyer, Lydia Jonson, declined to comment on a plea.

Judge Quentin Purdy transferred Hayes’s case from Westminster Magistrates Court to a higher criminal court. He is scheduled to appear at Southwark Crown Court on July 4. Charges haven’t been filed in the U.K. against anyone else in the investigation related to the manipulation of Libor.

The courtroom was filled with journalists and lawyers representing other suspects in the investigation.

Hayes was granted a continuation of his bail conditions, which includes a ban from travelling outside the U.K. He is also barred from contacting other suspects in the case. Mukul Chawla, a lawyer for the SFO, asked that the names not be read out in open court.

ICAP said in a statement that it has cooperated with the SFO probe.

Unnamed Employees

“We understand several other individuals have been referred to in the charges against Hayes, including unnamed employees of one of ICAP’s Global Broking subsidiaries,” ICAP said. “However, no ICAP company has been charged.”

Tullett Prebon said that it hasn’t been informed by any regulatory agency that its brokers are under investigation and has been cooperating with all Libor probes.

HSBC spokesman Jezz Farr, JPMorgan spokesman Brian Marchiony, RBS spokeswoman Linda Harper, UBS spokesman Dominik von Arx, Deutsche Bank spokesman Sebastian Howell, RPMartin spokesman Andrew Honnor, Rabobank spokeswoman Roelina Bolding and Citigroup spokesman Jeffrey French declined to comment.

Hayes, a British national who worked in Tokyo, was arrested in the U.K. probe on Dec. 11 along with two employees of the brokerage RP Martin. Hayes was charged on June 18 with eight counts of conspiracy to defraud after he answered police bail in central London.

Hayes joined UBS in 2006 and worked at the Swiss lender until 2009, when he joined Citigroup. He was dismissed by Citigroup less than a year later for involvement in suspected rate-rigging, a person with knowledge of the matter said in October. He worked at Edinburgh-based RBS from 2001 to 2003.

The SFO said on June 18 that their probe into rate-rigging is continuing.

(Updates with Tullett Prebon statement in 12th paragraph.)
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