Trader Finally Convicted in Manipulation of LIBOR

[Corey Dutton]

Found guilty in conspiring with 20 other traders and brokers to rig LIBOR to benefit his own trading positions, Tom Hayes was finally convicted and sentenced to 14 years in prison by a U.K. judge. This is the longest prison term for a banker or trader in the U.K. since the outset of the financial crisis in 2008. Because trillions of Dollars in financial products, investments, mortgages, etc. are linked to the LIBOR benchmark rate, this is a huge infraction and is almost cartel-like in its very nature.

Prosecutors say Mr. Hayes attempted to rig LIBOR on almost a daily basis while at UBS. He later moved to Citigroup and tried to do the same there, but was quickly fired after an internal investigation which uncovered his actions. This is the longest prison term given on a financial fraud case in the U.K. The judge in this case seeks to set an example. My opinion is that the sentence given to Hayes is not stiff enough. This fraud essentially undermines any previous confidence in the entire financial system. And further, given that such a small group of individuals could undertake such a fraud without detection, what other manipulations are going on that we aren’t yet aware of? Want a historic verdict to set an example to hold people accountable in the industry? That sentence given to Tom Hayes should have been life in prison.

Posted by Corey Curwick Dutton, Private Money Lender

Article Source: http://podcast.ft.com/p/2888