SFO makes first charges in Libor scandal

Former trader Tom Hayes is the first person to be charged in connection with Libor. He won't be the last.

by Emma Haslett
Last Updated: 12 Nov 2014
It’s a landmark day for the Serious Fraud Office: it has made its first charge in connection with the Libor rate-fixing scandal. Tom ‘rainman’ Hayes (nicknamed for his brilliance and poor social skills), the 33-year-old former UBS and Citigroup trader, is its man – he’s been charged with eight counts of conspiracy to defraud.

Hayes was a well-known trader, joining the Tokyo branch of UBS in 2006, and swiftly progressing to become one of its top traders of interest rate derivatives indexed to yen-denominated Libor, generating nearly $260m before he went to join Citigroup in 2009.

He was arrested, along with two others (who haven’t been charged), by the SFO last year, but wasn’t charged until this morning. He will appear before Westminster magistrate court on Thursday – although his lawyers have previously made clear that Hayes denies involvement in the scandal. In February, in a text from him to Wall Street Journal journalist David Enrich, he said ‘this goes much higher than me’.

The race is now on between British, US and Asian fraud investigators to secure convictions against the companies and traders responsible for the scam. The trouble is, the charges could put the SFO in conflict with a similar body in the US. Hayes was charged with similar dealings by the Department of Justice in December – although international precedent suggests that criminal matters should be resolved in his own country before he is extradited.

Three banks – including Barclays, UBS and RBS – have been already paid $2.6bn (£1.7bn) for the scandal. Now the investigation focuses on the individuals involved. The SFO could do with a win: with its wounds from recent troubles (Tchenguiz, Autonomy) still fresh, this is its chance to prove itself.

- Image: Flickr/ell brown

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