Libor rate-rigging scandal ‘driven by state’, claims jailed City trader
Libor fraud scandal ‘driven by the state’ claims City trader who served five years – now fighting to clear his name
A City trader who fought to clear his name after being jailed for manipulating Libor rates yesterday urged officials to ‘do the right thing’ as allegations emerged about authorities’ role in played the scandal.
Tom Hayes was jailed for five and a half years after becoming the first Briton convicted of setting benchmark interest rates in 2015.
The Criminal Cases Review Commission (CCRC) — which has the power to refer miscarriages of justice to the appeals court — met yesterday to review Hayes’ case.
It came hours after allegations emerged that central banks and governments pressured lenders to manipulate Libor and Euribor interest rates at the height of the financial crisis.
BBC journalist Andy Verity claims in his book Rigged, due out next month, that the US and UK authorities were informed of the move to cut tariffs.
Prison sentence: Tom Hayes (pictured) served five and a half years after becoming the first Briton convicted of setting benchmark interest rates in 2015.
But jurors at the trials of those accused of rigging the rates were never presented with evidence of higher-level manipulation, according to the book.
Hayes wrote on Twitter: “Today the CCRC meets to decide whether my case and by extension all Libor convictions should be returned to the appeals court. I hope they do the right thing.’
Libor – which is being phased out – was a London-based benchmark interest rate used to determine financial contracts around the world. Euribor is the European counterpart.
The rate is based on the provision of data by banks about the rates at which they want to lend each other.
A decade ago, allegations emerged that traders manipulated rates to make a profit — a scandal that led to banks and financial firms paying billions to settle regulatory investigations.
Between 2015 and 2019, the Serious Fraud Office (SFO) secured nine convictions against nine individuals accused of Libor and Euribor fraud.
But there are allegations that at the height of the financial crisis in 2008, when interbank lending dried up, there was pressure from authorities to keep rates low.
Data showing that banks were only willing to lend to a company at high rates could have cast doubts on its viability – at a time when authorities were desperate for calm.
Verity’s book alleges that central banks and the Bank of England have pressured lenders over benchmark rates. The Bank of England has described similar claims as ‘baseless’.
An FCA spokesperson said: ‘Full disclosure of evidence was provided as part of criminal prosecution in the UK and US.’
An SFO spokesperson said it had “secured the convictions of nine individuals for fare fraud – all of them pleaded guilty or were found guilty by a jury,” adding: “A number of those convictions have been reviewed by the Court of Appeal and they are all maintained.’
A Treasury Department spokesman said: “The Treasury Department has not attempted to influence individual banks’ Libor submissions.”