Former City trader Tom Hayes has been sentenced to 14 years in jail after become the first person to be convicted by a jury of rigging Libor.

In a landmark case, Hayes (35), a former UBS and Citigroup yen derivatives trader, was convicted of eight counts of conspiracy to defraud.

As the jury foreman returned the guilty verdicts, Hayes raised his hand to his head. Hayes’ wife Sarah shook her head.

Hayes, from Fleet, Hampshire, was accused of being the ringleader in a vast conspiracy to fix the London interbank offered rate (Libor), a benchmark for $450trillion of financial contracts and loans worldwide, between 2006 and 2010.

He was the first person to face trial after a global investigation into the rate-rigging scandal.

Motivated by greed and a desire for higher pay, the court heard that Hayes set up a network of brokers and traders that spanned 10 of the world’s most powerful financial institutions, cajoling and at times bribing them to help rig rates - designed to reflect the cost of interbank borrowing - for profit. Hayes would then place large bets on financial markets that were sensitive to Libor moves.

Managers aware

The former trader, who was diagnosed with mild Asperger syndrome just before his trial began, said he was transparent about trying to influence rates and his managers were aware.

But a jury of seven men and five women rejected his defence and found him guilty on all eight counts at Southwark crown court.

The case was seen as a big test for the Serious Fraud Office and its effectiveness in policing banking fraud.

Hayes claimed he was taking part in an “industry-wide” practice. He described the broking market he worked in as the wild west, a place with no rules and where relationships relied on lavish entertainment. He said it was this high-pressure environment which took its toll on him, prompting him to threaten brokers and pick fights with colleagues to move interest rates to aid his trading.

£150m earned

Hayes is the first person to stand trial for alleged manipulation of the Libor. He was arrested in December 2012 and questioned by the Serious Fraud Office. He told SFO investigators that his trades had earned £150million for UBS in a three year period.

He said he originally confessed to misconduct in 2013 after being “frozen with fear” that he would be extradited to America. He said he did not believe he had acted dishonestly with regard to Libor and that he wanted to do his job “as perfectly” as he could.

US prosecutors wanted to charge Hayes on three counts of conspiracy to fraud, with each one carrying a 20 to 30-year sentence.

Hayes has said he was transparent about trying to influence rates and that his managers were aware of and condoned trading methods that were common industry practice.

He subsequently withdrew from a co-operation agreement with the SFO and in December 2013 pleaded not guilty.

Guardian Service