US drops rate-rigging costs in opposition to ex-Citi and UBS dealer Tom Hayes

A New York decide has thrown out legal costs in opposition to Tom Hayes, the previous UBS and Citigroup dealer who served greater than 5 years in jail within the UK for conspiring to govern the Libor benchmark rate of interest.

The scandal over Libor — the London Interbank Supplied Charge — despatched shockwaves via international monetary markets greater than a decade in the past. A number of banks had been required to pay fines for rigging the benchmark of their favour.

At concern was the best way the rate of interest was set, based mostly on banks’ submissions quite than precise transactions, probably permitting merchants to push the speed larger or decrease and revenue from the impact on derivatives contracts.

Hayes had been accused by British and US prosecutors of being a key participant in a worldwide conspiracy to govern Libor, which was used to cost a whole lot of trillions of {dollars} of property worldwide.

The choice to drop US costs in opposition to Hayes follows an appeals court docket ruling in a separate US case, which overturned the Libor-rigging convictions of two former Deutsche Financial institution merchants. That ruling discovered the federal government had “failed to indicate that any of the trader-influenced submissions had been false, fraudulent or deceptive”.

Prosecutors within the Hayes case stated on Thursday that the earlier ruling introduced into query their skill to safe a conviction. Expenses in opposition to one other former dealer, Roger Darin, had been additionally dismissed. 

Hayes was convicted within the UK in 2015 of conspiring to rig Libor and sentenced to 14 years in jail, lowered to 11 on enchantment. He was launched in January final yr after serving five-and-a-half years and has continued to battle in opposition to the conviction. He’s awaiting a closing resolution from the Legal Circumstances Evaluation Fee, which investigates potential miscarriages of justice.

Hayes was instructed by the CCRC it had made a provisional resolution to not refer his case, however will now hear additional submissions from his authorized group earlier than it makes a closing resolution. 

In an announcement on Monday he stated: “The US Division of Justice has seen match to dismiss costs based mostly on the identical details, proof and case in regulation that the UK courts used to justify my 11-year jail sentence. That alone must be grounds sufficient for these instances to be referred again to the Court docket of Enchantment within the UK, and if want be to the Supreme Court docket, which is but to listen to the case.”

Hayes has argued he was made a scapegoat for his managers and the banks themselves, who he stated supported his actions. 

Hayes was a star derivatives dealer at UBS in Tokyo from 2006 till 2009 and claimed to have made the financial institution greater than $280mn of earnings. He was poached by Citigroup with a $4.2mn becoming a member of bonus, solely then to be dismissed 10 months later because the Libor scandal accelerated. 

The UK Severe Fraud Workplace closed its probe into price rigging in 2019. 13 people had been charged for conspiracy to defraud and 4 had been convicted.