US court drops Libor rate-rigging charges against ex-UBS trader
A New York court has dismissed a criminal indictment against Tom Hayes, the British former trader at UBS and Citigroup who served five and a half years in a UK prison for rigging the Libor lending benchmark.
Prosecutors in the US filed a motion to dismiss the case against Hayes and another former UBS trader, Roger Darin.
It followed a US appeals court in January throwing out the convictions of two former Deutsche Bank traders, Matthew Connolly and Gavin Black. The reversal of those convictions “implicates the theory charged in this case and the government’s ability to prove this case”, the motion said.
Hayes was the first person to be convicted by jury of leading a conspiracy to defraud by fixing the Libor rate in August 2015, and one of nine eventually sentenced to prison. He was released from HMP Ford, on the south coast of England, in January 2021.
The Libor rigging scandal emerged after the global financial crisis of 2008, further tarnishing the reputation of the City after enormous government bailouts of lenders.
Banks used Libor, the London interbank offered rate, to set the borrowing cost on contracts with notional values of hundreds of trillions of pounds.
Regulators found evidence that traders on a committee setting the rate every day had fixed it for their own benefit. Banks paid fines worth hundreds of millions of pounds.
During his trial, Hayes was described as a ringleader in a conspiracy to rig the rate. However, his counsel argued that there were people more senior to him who were aware of the activities, and that he was “scapegoated” by the UK’s Serious Fraud Office as it tried to find the culprits for the scandal.
Hayes has always maintained his innocence, and has fought to have his conviction quashed, most recently through the UK’s Criminal Cases Review Commission (CCRC), which investigates potential miscarriages of justice.
His representative on Monday said the CCRC had “made a provisional decision not to refer his case, but it agreed to hear further submissions from his legal team before making a final ruling”. The final ruling was described as “imminent”.
In written comments, Hayes called for the CCRC to refer his case back to the court of appeal.
Hayes said the dismissal of the charges meant the US Department of Justice was “explicitly acknowledging the flawed legal theory pursued in the cases of so-called Libor rigging”.
He said: “At last, after 10 years the threat of extradition to the US for doing my job legitimately as a trader has been lifted. It is now time for the UK to examine the convictions of all traders. The UK is now the sole jurisdiction that deems our conduct to have been criminal.”
Hayes said the UK’s legal position was “demonstrably absurd”.