The first financial trader to face prosecution accused of rigging global benchmark interest rates goes on trial in London on Tuesday, following a scandal that handed banks hefty fines and damaged reputations.
26.05.2015
(AFP) The first financial trader to face prosecution accused of rigging
global benchmark interest rates goes on trial in London on Tuesday,
following a scandal that handed banks hefty fines and damaged
reputations.
Britain's Serious Fraud Office (SFO) alleges Tom Hayes was the
ringleader of more than a dozen traders it says worked to rig the London
Interbank Offered Rate (Libor) in the mid to late 2000s.
Formerly a trader with Swiss bank UBS and its US rival Citigroup, the
35-year-old Briton will go before the court in Southwark, across the
river from London's financial centre in a trial expected to last weeks.
Libor, an estimate of the average interest rate for banks borrowing
from other banks, is a key reference for many financial products from
consumer loans to savings accounts, and the county will argue that Hayes
manipulated it in order to favour his own trades.
Hayes has pleaded not guilty in the case, seen as a test for
regulators on whether bankers can be jailed for offences and for the
SFO, following a series of blunders and setbacks.
The Libor scandal came to light in 2012 when British bank Barclays
was fined £290 million (409 million euros) by British and
United States authorities for manipulation.
Since then dozens of traders have been fired and 20 more people
charged over manipulation, with a second trial due to start in London
later in 2015.
Banks including UBS, RBS and Rabobank have also paid fines, with
Germany's Deutsche Bank paying a record total of $2.5 billion for Libor
rigging to British and US authorities.
In a further scandal that occurred after a regulatory crackdown on
Libor rigging, six major global banks were fined nearly $6 billion,
accused of cheating clients by coordinating trades in private chat rooms
to manipulate the prices of currencies in exchange markets.