Jailed Libor Trader Hayes Challenges FCA's Ban in Court

  • Hayes case filed in December and listed at Upper Tribunal
  • Trader is serving an 11-year prison sentence for Libor-rigging

Tom Hayes, the former UBS Group AG and Citigroup Inc. trader jailed for 11 years for conspiring to rig Libor, is challenging the U.K. regulator in court to overturn an order banning him from working in the industry.

Hayes filed a claim against the Financial Conduct Authority in London’s Upper Tribunal on Dec. 23, according to court listings. The suit relates to an FCA prohibition order against Hayes, his lawyer, Karen Todner, said.

Tom Hayes

Photographer Matthew Lloyd/Bloomberg

Hayes became the first person to be convicted over manipulation of the London interbank offered rate, or Libor, a key interest-rate benchmark pegged to trillions of dollars of securities. He was initially sentenced in 2015 to 14 years in prison, reduced to 11 on appeal. A dozen firms have paid about $9 billion in fines and more than 20 traders have been charged following global investigations into the scandal.

Todner said the 37-year-old Hayes is representing himself in the FCA proceedings, while she is acting for him as he appeals his conviction. She said the Hayes family declined to comment on the FCA case. A spokeswoman for the regulator also declined to comment.

It’s normal for the FCA to ban an individual from working in a regulated role in financial services following a criminal conviction. Kweku Adoboli, the former UBS trader sentenced to seven years in 2012 for causing a $2.3 billion loss to the bank, was banned in 2015, four months after he was released from prison.

Hayes was denied an appeal in the Supreme Court -- the U.K.’s highest court -- last year. He referred the matter to the Criminal Cases Review Commission, an independent organization set up to investigate suspected miscarriages of justice, in January. He has raised nearly 78,000 pounds ($97,000) through crowdfunding for his CCRC appeal.

Another trader caught up in Libor rigging at Barclays Plc, Jay Merchant, had his prison sentence reduced by 12 months to 5 1/2 years, by a London appeals court Wednesday. Merchant, 46, was found guilty in July following a three-month trial in which he was accused of conspiring with fellow employees to rig Libor between 2005 and 2007.

Sentencing over Libor in the U.K. has been more severe than in the U.S. where some traders have escaped prison entirely after pleading guilty and cooperating with prosecutors.

— With assistance by Jeremy Hodges

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