LONDON, June 30 (Reuters) - Tom Hayes, the former UBS and Citigroup trader on trial in London on Libor rigging charges, told a broker to pay Hayes’ 1,000 pound ($1,571.90) restaurant bill as a reward for giving the broker business, a court heard on Tuesday.
Hayes, a former yen derivatives trader based in Tokyo, was on gardening leave from UBS at the time in 2009, having been hired by Citigroup that year.
“I guess it will be a case of leaving your credit card details with the restaurant,” Hayes wrote in an email on Nov. 11, 2009 to the broker, who cannot be named for legal reasons.
“I really appreciate this, I reckon with wine and service it will be about 1,000 GBP which I know is hefty,” Hayes wrote in the email shown to the court.
Britain’s Serious Fraud Office has charged Hayes with eight counts of conspiracy to defraud between August 2006 and September 2010, a criminal offence that can carry a jail sentence of 10 years.
Hayes has pleaded not guilty and is expected to lay out his defence next month in the trial which is scheduled to last well into August.
Prosecutors allege Hayes, 35, was motivated by greed when he set up a network of traders and brokers at some of the world’s most influential financial institutions and pressured others to move benchmark rates in directions that benefited his trading book. Libor or the London interbank offered rate has become a benchmark for roughly $450 trillion of financial contracts from mortgages to loans worldwide.
The prosecution said Hayes persuaded, threatened, cajoled and rewarded brokers to help move benchmark rates to boost his trading positions, according to evidence presented to the court. In return, they received commissions on trades and other payments, the court was told.
Brokers also spent considerable funds entertaining preferred traders, the court heard.
The court was also shown an email dated Oct. 23, 2008, in which one broker told another broker that he (the first broker) “lies” about rates “all the time.”
“(Tom) does fully appreciate your input mate,” one broker wrote in an email shown to the court. But in the email the broker also said: “I lie about the levels all the time and it makes my life easier.”
The brokers cannot be named for legal reasons.
Hayes told investigators during 82 hours of interviews in the months after he was arrested in December 2012 that this evidence showed how he could never really be sure his requests for higher or lower Libor rates were followed.
According to transcripts of interviews with investigators and emails shown and read out to the jury by the prosecution, Hayes has said his actions were consistent with those of others, and his managers were aware of business practices.
Hayes believed investigations instigated in the U.S. at the time revolved around banks “lowballing” rates to flatter solvency perceptions during the credit crisis and not trader attempts to move rates fractionally for commercial reasons, according to the evidence shown to the court.
In the interviews, transcribed and summarised by the SFO and read out in court, Hayes said banks changed rules about traders talking to Libor submitters retrospectively and threw traders “under the bus” by firing them as a global Libor investigation gained traction.
$1 = 0.6362 pounds Reporting by Kirstin Ridley. Editing by Jane Merriman