Hayes: UBS Libor guide proves bank 'threw him under the bus'

Former trader says adjusting Libor to suit commercial interests was company policy at UBS

Hayes claims UBS made him a scapegoat for an endemic practice

Tom Hayes, a former trader accused of manipulating Libor, has said his erstwhile employer UBS "threw him under the bus", saying the bank's manual for Libor submitters proved that it was company policy to adjust rate submissions to suit its commercial interests.

First presented in London's Southwark Crown Court last week, the document instructs Libor submitters to clear their judgements on the rate with certain named traders. Defence lawyer Neil Hawes last week suggested the traders held derivatives positions dependent on Libor.

Today (July 10) Hayes – who subsequently moved to Citi – said the guide demonstrated that Libor manipulation was "written company policy" at UBS.

"It's actually giving [traders] the instructions, saying 'this is how we maximise our revenue'," he said. "This is the instruction manual for manipulation."


Libor – the London interbank offered rate – is calculated from submissions made daily by certain "panel" banks and should reflect the cost of interbank cash borrowing in different currencies. The benchmark is linked to the pricing of hundreds of trillions of dollars' worth of financial products.

"I read that document and I thought it corroborated what I knew already [that banks set Libor with commercial interests in mind], and it was there in writing," Hayes said. "What happened to me was really, really wrong ... UBS had thrown me under the bus and I was up against two 50 billion-dollar organisations [UBS and Citi]," he said, adding to that list the US Department of Justice and UK authorities involved in investigations into the Libor-rigging scandal.

Hayes, the first person to face prosecution in the scandal, said he was "flabbergasted" by what he read and that the document demonstrated "the sheer hypocrisy of UBS".

The defence has maintained Libor manipulation was endemic at UBS and at other panel banks.

Hayes has pleaded not guilty to eight counts of conspiracy to defraud.

The defence also questioned Hayes on his interview with the UK's Serious Fraud Office (SFO) in early 2013, in which he admitted to dishonesty. Earlier this week Hayes said he had done so as part of a cooperation agreement with the SFO, in the hope that UK charges would prevent his extradition to the US. Hayes has since reneged on this deal and maintains his innocence.

Today a tearful Hayes explained how he felt unable to speak freely during the SFO interview: "I would have much rather have said, 'look, I don't feel like I've done anything', but I couldn't say that."

Hawes presented Hayes with the transcript of the SFO interview and asked the former trader if he thought admitting dishonesty was the right thing to do.

"Everyone is thinking now about honesty and dishonesty," said Hayes. "At the time I didn't think about any of it, I didn't think about whether it was right or wrong. People don't think 'is doing my job honest or dishonest?' They do their job."

The trial continues.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Investment banks: the future of risk control

This Risk.net survey report explores the current state of risk controls in investment banks, the challenges of effective engagement across the three lines of defence, and the opportunity to develop a more dynamic approach to first-line risk control

Op risk outlook 2022: the legal perspective

Christoph Kurth, partner of the global financial institutions leadership team at Baker McKenzie, discusses the key themes emerging from Risk.net’s Top 10 op risks 2022 survey and how financial firms can better manage and mitigate the impact of…

Emerging trends in op risk

Karen Man, partner and member of the global financial institutions leadership team at Baker McKenzie, discusses emerging op risks in the wake of the Covid‑19 pandemic, a rise in cyber attacks, concerns around conduct and culture, and the complexities of…

Moving targets: the new rules of conduct risk

How are capital markets firms adapting their approaches to monitoring and managing conduct risk following the Covid‑19 pandemic? In a Risk.net webinar in association with NICE Actimize, the panel discusses changing regulatory requirements, the essentials…

Building resilience into ESG risk management

Risk and resilience continue to play an important role in the navigation of an increasingly uncertain world. Fusion Risk Management explores why it is equally crucial for technology to support organisations in addressing pertinent environmental, social…

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here