Citigroup Manager Said Hayes Boasted of Libor Rigging Ability

A Citigroup Inc. official said in 2010 that Thomas Hayes, who is on trial for manipulating Libor, openly discussed at a meeting how he influenced benchmark rates while at UBS Group AG.

Andrew Thursfield, Citigroup’s European head of risk treasury, met Hayes in October 2010, two months before Hayes joined the U.S. bank, one of Hayes’s lawyers told jurors in London Thursday.

Following the meeting Thursfield, who oversaw the Citigroup’s Libor submissions, spoke to his boss and said he was “concerned” about how Hayes discussed his ability to move the rate by coordinating with UBS’s Libor submitters, according to a recording of the Oct. 9 conversation played to jurors.

“He just calls up his cash guys and asks them to move the Libors up or down, um, depending on how his fixings were,” Thursfield said to his manager Stephen Compton.

The 35-year-old Hayes is accused of eight counts of conspiracy to manipulate the London interbank offered rate, the benchmark used to value more than $350 trillion of loans and securities. The former trader, who worked at banks including UBS and Citigroup, has pleaded not guilty.

100 Percent Yes

When asked by Compton whether he thought Hayes expected to have the same relationship with rate setters at Citigroup, Thursfield said: “Oh, 100 percent yes.”

Thursfield also said on the call that Hayes told him about a contact at Deutsche Bank AG who had tipped him off when the lender was about to drop its Libor submission by 20-25 basis points.

“He was quite openly talking about how, yeah, how they told him in advance how they were gonna do it, and he loaded into the position ahead of that,” Thursfield told Compton.

Under questioning by lawyers for Hayes Thursday, Thursfield said he didn’t try to block him from being hired and attributed the trader’s comments to “idle boasting.”

Hayes started at Citigroup in December 2010. In June 2011, he approached a Libor submitter on Thursfield’s team through a derivatives trader in London and asked for a higher yen Libor, the court heard. Thursfield reported him to the bank’s compliance department.

Hayes was dismissed in September 2011 following an internal investigation which found he had tried to manipulate Libor by making requests of brokers and traders to submit favorable rates.

Thursfield, who works in London, and Compton played no part in the hiring or firing of Hayes, and had no oversight of the Tokyo-based derivatives trader.