Libor scapegoat Tom Hayes has evidence on top RBS/UBS crims

[TonyGosling]

“What is most stunning is that these traders and submitters were willing to say these things, knowing that there was a verbatim record being kept. What does that tell you not just about the institution itself, but also about the FSA and the Serious Fraud Office? That is the one of the most important and revealing fact that comes out of this. The perception inside the bank was ‘we don’t need to worry about those clowns’.”

By pleading guilty to one count of wire fraud in its Japanese arm, RBS managed to avoid having its US operations shut down by the US Department of Justice. Over and above the plea, and a two-year deferred prosecution in the United States conditional on good behaviour in that jurisdiction, RBS is paying a fine of $612m (£390m) to three regulators. “We are holding RBS accountable for a stunning abuse of trust,” said assistant US attorney general Lanny Breuer. “Our message is clear: no financial institution is above the law.”

The penalties, handed out alongside revelations of hundreds of lurid, sexist and semi-literate ‘IMs’ or instant messages in which RBS traders and managers laughed as they displayed a casual disregard for the law, were unveiled at 1pm on Wednesday. They included one from Neil Danziger, a yen foreign exchange trader, who the bank dismissed in 2011, dated 15 September 2009. Danziger celebrated one successful falsification of the Libor rate by comparing his actions to those of a hooker pulling up and down her underwear. “im [sic] like a whores drawers,” he messaged.

...................

Hayes, a former RBS trader also known as ‘Rain Man’ as a result of his reported lack of social skills, “dwarfed them all” where Libor rigging was concerned, as he “spearheaded a massive effort” to manipulate benchmark rates, according to the CTFC. On leaving RBS, Hayes, who also made massive trading profits for each subsequent employer, jumped ship to Royal Bank of Canada, then to UBS, then to Citigroup. Hayes, 33, was seen as a valuable commodity in investment banking circles due to the strength of his strong network of contacts who could help him nudge the Libor rate up and down. His pay package more than doubled from $2m to $5m when he moved from UBS to Citi.

However, Hayes was fired by Citi in September 2010 and in December 2012 he was arrested by the Serious Fraud Office and bailed without charge. Separately, he was charged with wire fraud, price-fixing and conspiracy by the US Department of Justice. According to an article in the Wall Street Journal, Hayes is now ‘singing like a canary’, and seeking to prove to the authorities that Libor rigging was condoned at the highest levels at his former employers. Jennifer Arcuri, a close friend of Hayes, said he is helping police with their inquiries. “He believes he’s innocent,” Arcuri told the WSJ. She added that trying to rig Libor “was common industry practice. It was like spanking children in the 1970s – it wasn’t bad.”
http://www.nakedcapitalism.com/2013/02/ian-fraser-stephen-hester-the-g reat-escape-artist.html

[TonyGosling]

Libor scandal: ex-UBS trader Tom Hayes is charged by fraud office

Nikhil Kumar Tuesday 18 June 2013
http://www.independent.co.uk/news/business/news/libor-scandal-exubs-tr ader-tom-hayes-is-charged-by-fraud-office-8662664.html

A former UBS trader was today charged with offences of conspiracy to defraud in connection with the investigation by the Serious Fraud Office into the manipulation of the Libor interbank lending rate.

Tom Hayes, who is 33 and from Surrey, was one of the three individuals arrested on December 11 by officers from the Serious Fraud Office (SFO) and City of London Police.

He attended Bishopsgate police station this morning where he was charged by City of London Police with eight counts of conspiracy to defraud. He will appear before Westminster Magistrates' Court at a later date.

The SFO said its investigation into the manipulation of Libor continues.

Late last year, Mr Hayes, who is a one-time Citigroup employee, and another former trader, Roger Darin, were charged by US authorities.

At the time, UBS agreed to pay a record $1.5bn (£1bn) fine to regulators in the US, UK and Switzerland as part of the Libor investigation.

A successful SFO prosecution in the UK is likely to ensure that Mr Hayes would not be extradited to face similar charges in the US.

[TonyGosling]

Wife of 'Rain Man' Pours Out Tweets

By DAVID ENRICH
http://online.wsj.com/article/SB10001424127887323582904578487160073985 062.html

The bank trader known as "Rain Man" finally has someone to shelter him from the storm of the Libor scandal: his wife.

Tom Hayes, the former UBS AG UBS +0.84% and Citigroup Inc.
C +1.32% trader
who authorities allege played a role rigging the London interbank offered rate, has been mostly silent since the U.S. Justice Department charged him last December with fraud. Mr. Hayes, known by colleagues as "Rain Man" for his brainy but socially awkward demeanor, hasn't entered a plea. His lawyers haven't uttered a peep. His only public comment was a January text message to The Wall Street Journal saying: "This goes much much higher than me."

In the last week, however, Mr. Hayes's wife, Sarah Tighe Hayes, has emerged from the shadows to defend him.

A few days ago, she started tweeting under the handle @SarahTigheHayes. Mixed in with tweets about soccer and child-care are a handful of posts in which she vented about Libor and what she sees as the U.S. justice system's propensity for overkill.

Mr. Hayes got his start in finance as a trader for Royal Bank of Scotland Group RBS.LN +2.22% PLC straight out of college in 2001. He joined UBS in Tokyo in 2006
and, authorities allege, quickly became involved in trying to manipulate Libor in order to boost his trading profits.



Ms. Hayes, who at the time was Sarah Tighe, met Mr. Hayes in Tokyo around that time, according to people familiar with their relationship. In June 2009, she accompanied Mr. Hayes to drinks at a Tokyo bar where Citigroup Inc. executives were trying to convince him to jump from UBS; she did most of the talking, according to people who were there.

They married in September 2010, two weeks after Citigroup fired him for his alleged involvement in Libor manipulation.

Ms. Hayes's first tweet came late Friday night. It included a link to an article about U.S. prosecutors seeking what she described as "utterly ridiculous" prison sentences for former UBS bankers who were convicted of scheming to rig municipal-bond deals. That case isn't connected to the Libor saga.

The following morning, Ms. Hayes—who describes herself on Twitter as a "lawyer, mother to a toddler son, avid fan of Japan"—started opining about the Libor scandal. She asked why the Justice Department has reached settlements only with European banks, rather than any U.S. institutions. That grievance is shared by plenty of London-based bankers, traders and lawyers. (The U.S. authorities are still investigating at least a dozen banks, including at least three based in the U.S.)

A few minutes later, she tweeted a link to a column on the Guardian's website that argued that "Libor is a dud, as far as prosecutorial glory goes."

The 33-year-old Mr. Hayes is the highest-profile individual charged with wrongdoing in the Libor scandal, although other individuals are under legal scrutiny in the U.K. and U.S.

Ms. Hayes isn't the first family member of a banker enmeshed in the Libor scandal to turn to Twitter.

Last July, Robert Diamond was ousted as chief executive of Barclays BARC.LN +1.23% PLC after the bank's settlement of Libor-rigging allegations set off a
U.K. political storm. Mr. Diamond's daughter tweeted an obscene message directed at British politicians who had criticized her father. She later deleted the tweet. "No one in the world I admire more than my dad," she wrote in another tweet. "16yrs building Barclays. Shame to see the mistakes of few tarnish the hard work of so many."

Ms. Hayes's antipathy toward the U.S. justice system is perhaps understandable. If her husband were extradited to the U.S. and then convicted on the fraud charges, he could face a prison sentence of well over a decade, according to lawyers who aren't involved in his case.

But Mr. Hayes appears unlikely to meet that fate—and that has caused friction between U.S. and British law-enforcement authorities. Late last year, U.S. officials informed their U.K. counterparts that they planned to charge Mr. Hayes with criminal fraud. The U.K.'s Serious Fraud Office then arrested Mr. Hayes the day before the U.S. charges were filed—blindsiding and angering Justice Department officials, according to people familiar with the case.

The U.K. released Mr. Hayes on bail and hasn't charged him with a crime.

Criminal-defense lawyers who aren't involved in the case say Mr. Hayes is likely to try to strike a deal in which he pleads guilty to fraud charges. In that case, British double-jeopardy laws likely would preclude him from being extradited to the U.S. to face similar charges, the lawyers say.

U.S. officials privately acknowledge that they doubt Mr. Hayes will ever see the inside of an American courtroom.

[TonyGosling]

Holy Cow - Rain Man who's just been charged today's wife Sarah tweeted a link to this!!

[TonyGosling]

Got a proper link now to Sarah Tighe Hayes' deleted Twitter account
http://www.bilderberg.org/SarahTigheHayes.htm


Sarah tweeted about this for example sayng:
"Sorry, what?"

Libor accused Tom Hayes moved shares into wife's name
Tom Hayes, the British former UBS trader charged in the US with rate-rigging, made arrangements to transfer £50,000 worth of shares in a tech start-up into his wife’s name as the Libor allegations emerged, it can be revealed....
http://www.telegraph.co.uk/finance/libor-scandal/9759767/Libor-accused -Tom-Hayes-moved-shares-into-wifes-name.html

[TonyGosling]

The other individual implicated with Tom Hayes is Neil Danziger who worked at the same trading desk in RBS with Tom Hayes
It looks to many as if the Libor fraud techniques were developed here at RBS in or around 2001-2003 then taken elsewhere to Citygroup, UBS etc. Hayes, his wife, the SFO, the City of London Police and Danziger will all know that what Hayes was doing will have been sanctioned with a nod and a wink from much higher up in the organisation
This is racketeering and there is an attempt to make Tom Hayes the fall guy. He could even be suicided since he can testify against senior alleged 'blue blood' racketeers in RBS, UBS and Citygroup.
http://www.bloomberg.com/news/2013-02-07/rbs-trader-helped-ubs-s-hayes -with-libor-bribes-regulators-say.html

[TonyGosling]

"This goes much much higher than me," says alleged Libor-fixing ringleader Tom Hayes in a text to the WSJ's David Enrich. Known as "Rain Man" for his brilliance and awkward social skills, Hayes has emerged as "the connective tissue" in banks' attempts to profit as he skipped from RBS to RBC (RY) to UBS, and finally to Citigroup (C).
http://seekingalpha.com/currents/post/815431

[Whitehall_Bin_Men]

125 million life sentences for Bilderberg BBC £2tn Barclays Libor fraud chairman Marcus Agius = 10yrs for £2k benefit fraud

https://twitter.com/TonyGosling/status/380732043229167616

[TonyGosling]

Libor trader Tom Hayes has evidence to jail RBS RBC UBS & Citigroup banksters - so SFO bang him up
Pathetic SFO director David Green at 11:35 in.
http://www.bbc.co.uk/programmes/b063zx1j

LIBOR Scapegoat Found Guilty, Sentenced To 14 Years
Tyler Durden's pictureSubmitted by Tyler Durden on 08/03/2015
http://www.zerohedge.com/news/2015-08-03/libor-scapegoat-found-guilty- london-jury
Update: Hayes has been sentenced to 14 years in jail.

* * *

Tom Hayes, the former UBS trader standing trial for his role in manipulating LIBOR, was found guilty on eight counts in a London court. The jury, which deliberated for a week, was unanimous in its decision. To wit, from Bloomberg:

Former UBS Group AG and Citigroup Inc. trader Tom Hayes, the first person to stand trial for manipulating Libor, was found guilty of eight counts of conspiracy to rig the benchmark rate.

After a week of deliberations, jurors unanimously found that the 35-year-old conspired with traders at brokers to dishonestly game the London interbank offered rate to benefit his own trading positions.
As Bloomberg notes, Hayes is the first person to stand trial for rigging the benchmark and had contended that he only pleaded guilty in the first place because he had an intense fear of having to serve a lengthy prison sentence in the US.

Hayes was also quick to remind the court that the practice of gaming the submissions to benefit trading books was so ubiquitous as to be enshrined in an official LIBOR rigging guide called "Guide to Publishing Libor Rates" that was distributed to UBS employees. It was also revealed during the trial that Hayes has been diagnosed with Asperger’s syndrome, which means he tends to "only see the world in black and white" - apparently that was supposed to be seen as a mitigating factor.

In the end, it appears that the public needed a head (not literally we hope), and because prosecuting senior executives for such things is absolutely out of the question even when, as we saw last week with Anshu Jain, they were not only supportive of the practice but in fact physically moved desks around to facilitate it, Hayes will be the fall guy.

Or, as we put it in June: "Will Hayes' quest to diffuse responsibility and bring down more senior executives with him succeed? Hardly."

We'll give Tom the last word here and although we're not entirely sure what this quote means, we're sure there's a lesson in it somewhere:

"I’ve always wanted to do my job as perfectly as I could, whether I was cleaning a deep fat fryer or deboning a chicken. They always gave me those jobs because they knew there would be no chicken left on the bone and no fat left in the fryer."

[TonyGosling]

nvestigative reports - financial journalist Ian Fraser on this week's guilty verdict for Libor trader - whistleblower Tom Hayes. Interview with Ian Fraser, author of FT 'book of the decade' 'Shredded: Inside RBS - the Bank that Broke Britain': trader (not banker) Tom Hayes is jailed for 14 years for Libor fixing, but what about his UBS bosses that encouraged him to do it by handing him their "Instruction Manual on Fixing Libor" entitled the “Guide to Publishing Libor Rates”? Who wrote and published that manual on how to rig Libor? Chief Executive of German Stock Exchange Carsten Kengeter was in on UBS Libor fixing meetings; Libor fixing? How does it affect us? What is theLibor rate? and how does fixing them effect us? Efinancecareers article by Sarah Butcher that names Tom Hayes's colleagues also involved in Libor fixing, crossfit athlete Mirhat Alykulov, Tom Hayes' former assistant from UBS in Tokyo is having a nice time now enjoying executive fight nights – shouldn't they be jailed too? Goldman Sachs Offered Tom Hayes $3 Million Bonus to Quit UBS - Money laundering means fines that don't even match the criminal profits made; UK has a glass ceiling for justice, banksters part of a criminal elite who make donations to Tory party who then appear to protect them from prosecution; Iceland has largely dealt with its crooked bankers by jailing them; RBS and some other banks not declaring profits and not paying any corporation tax; public sector banking?
http://www.radio4all.net/index.php/program/82153
https://politicsthisweek.wordpress.com/2015/08/07/bcfm-weekly-politics -show-presented-by-tony-gosling/

[Whitehall_Bin_Men]

They knew
They benefitted
Some more names

Senior UBS staff Michael Pieri & Carsten Kengeter were in on Libor rigging & benefitted personally



'Pete the Greek' will not face Libor action - FT.com
http://www.ft.com/cms/s/0/54ef3adc-37a4-11e5-b05b-b01debd57852.html
A UBS banker at the heart of the Libor-rigging scandal will have no enforcement action taken against him, after the UK financial watchdog failed to persuade its own legal panel of experts of its case. Panagiotis Koutsogiannis, who was known as “Pete"


Rate-Rig Spotlight Falls on 'Rain Man'
By DAVID ENRICH Feb. 8, 2013
http://www.wsj.com/articles/SB1000142412788732444590457828581070610744 2

"Who was I to question what they were doing? I thought it was weird, but that's how they did it," Ms. Arcuri says he told her. Within a few months, based on practices at the bank and feedback from his bosses, Mr. Hayes considered it part of his job, said a person familiar with his thinking.

His trading strategy, say U.S. and British authorities, involved bets on the direction of certain Libor rates relative to other benchmarks. For example, he bought derivatives that would gain value if there was a narrowing of the difference between yen Libor and the Tokyo overnight average rate, a benchmark set by the Bank of Japan. That meant, at least initially, he had an incentive to see yen Libor rise.

To make that happen, he was in almost daily contact with UBS employees, asking them to move the bank's Libor submissions up or down. Mr. Hayes's boss was aware of his actions, according to the Justice Department.

Then, regulators say, Mr. Hayes took Libor manipulation a step further, into an effort involving other banks. Around January 2007, he started contacting not just other UBS employees to try to skew the Libor rate but a handful of friends and former colleagues at other banks.

‘This goes much much higher than me.’
—Accused Libor Manipulator Tom Hayes
Many UBS derivatives traders and managers "were involved in the manipulative conduct," the U.S. Commodity Futures Trading Commission said in December. But, in a reference to a trader that clearly was Mr. Hayes, the CFTC said his actions "dwarfed them all" as he "spearheaded a massive effort" to manipulate benchmark rates.

In an email the Justice Department released when it settled with UBS, Mr. Hayes, admitting his request was a "bit cheeky," asked a trader to raise the rate in the Libor submission from the trader's bank. "Anytime I can return the favour let me know as the guys here are pretty accommodating to me," Mr. Hayes wrote. The unidentified other trader replied, "I will try my best."

As one of Tokyo's biggest derivatives traders, Mr. Hayes was a coveted customer of brokerage firms that match buyers and sellers. Soon, Mr. Hayes roped certain brokers, too, into his Libor-massaging effort, according to the Justice Department. It said that after discussing the strategy with his UBS boss, he started asking the brokers to help influence other banks' Libor submissions. In exchange, he routed transactions and sometimes cash to the brokers, according to the Justice Department and other regulators.

The strategy wasn't a secret. Each morning at a meeting of UBS's interest-rate-derivatives desk in Tokyo, Mr. Hayes told colleagues which way he planned to push Libor that day, according to the Justice Department. Mr. Hayes was so open about his strategy that he would change his status on his Facebook page to reflect his daily desires for Libor to move up or down, said a person familiar with the matter.

Though generating tens of millions of dollars a year in revenue, he worried his bosses weren't satisfied. "Have had ok year but management still pushing me for more," he wrote to a trader at another bank in November 2007, according to the CFTC.

As Mr. Hayes brought in more revenue, UBS loosened the reins. The bank let him take so much risk that he could lose up to $3 million for every hundredth of a point rates moved, said people familiar with the matter.

He caught the attention of rival banks. Goldman Sachs Group Inc. put out informal feelers about hiring Mr. Hayes, according to people familiar with the matter.

Citigroup executives wooed him in June 2009 at a * bar in Tokyo. As they showered him with praise, say people who were there, Mr. Hayes rarely spoke, instead letting his girlfriend, a lawyer, answer questions.

After Citigroup offered Mr. Hayes more than double the nearly $2 million he was earning at UBS, his UBS boss, Michael Pieri, lobbied a senior UBS executive to counter with a big bonus, according to people familiar with the offer. Emails released by the Justice Department show Mr. Hayes's boss cited the trader's "strong connections with Libor setters in London. This information is invaluable for the derivatives books."

Among those the email was addressed to was Carsten Kengeter, now the head of UBS's noncore division, according to a person familiar with the matter. He declined to comment through a UBS spokesman. Swiss regulators said in December they didn't find any evidence UBS top management knew of Mr. Hayes's activities. Mr. Pieri, no longer at UBS, didn't respond to requests for comment.

But when the senior UBS executive asked for input about Mr. Hayes, a trading-desk manager emailed: "I find it embarrassing when he calls up his mates to ask for favours." The manager added, "It makes UBS appear to manipulate others to suit our position."

UBS decided not to award Mr. Hayes the bonus. In December 2009 he joined Citigroup. He initially kept a low-profile, dining at KFC while colleagues hit Tokyo's premier bars and clubs. "There was zero flash about him," a former colleague says.

At a retreat in April 2010, the head of Citigroup's Japanese investment bank, Brian Mccappin, told traders that Mr. Hayes was "a star" and that their unit would shift into more derivatives trading to take advantage of his talent, according to attendees.


Jurors were shown chat logs between Hayes and Guillaume Adolph, a trader at Deutsche Bank, in 2009.
http://www.mirror.co.uk/news/uk-news/banker-accused-libor-fixing-fraud -5803733
The pair often discussed moving the Libor rate by a small number of ‘base points’.

On one occasion the Frenchman rang Hayes to suggest a more concerted effort to fix the rate, the court heard.

Hayes told the investigator the trader had called him on his mobile.

“I should have realised at that point that he’s ringing because he doesn’t want it to be documented,” Hayes said.

He continued: “Libor was not a regulated product, we had no compliance training, we had no rules outlined to us either internally or externally on Libor.

“I was operating in a grey area, I know I was trying to move rates up and down but I couldn’t put my finger on a particular thing.”

He added: “With the Guillaume thing I blatantly knew that I shouldn’t be doing that... [but] I was participating in an industry-wide practice that predated my arrival at UBS and post-dates my departure.”

[TonyGosling]

Tom Hayes' trajectory...
RBS, Royal Bank of Canada (RBC), Citigroup, Union Bank of Switzerland (UBS)
SO far
UBS staff Panagiotis Koutsogiannis, Michael Pieri & Carsten Kengeter
Citigroup staff Brian Mccappin
Deutsche Bank trader Guillaume Adolph

also implicated
Barclays Libor fraud chairman Marcus Agius
HSBC Libor fraud & Money Laundering Chairman Lord Stephen Green

[Whitehall_Bin_Men]

Tell the truth
http://www.breakingviews.com/storypage/story.aspx?id=21211846

Tom Hayes gives the impression of being a remarkably honest criminal. The former star trader, who has started a 14-year prison sentence for manipulating the Libor interest rate, explained his actions to prosecutors in careful detail. He admitted to breaking the written rules and his justification – that he believed his bosses and the profit-hungry culture they embodied offered at least tacit approval of his behaviour – is all too plausible. When a man like that explains his ethical state of mind, he is worth listening to.

Hayes did not say that he decided what he was doing was honest and right. Nor did he admit that it was wrong but somehow justified for him, because he was special or because he could get away with it. Rather, he explained that the manipulation of rates was not the ethical issue which concerned him.

What he was worried about was being good in a different sense – as a professional. He succeeded. He was good at his job. As he explained to investigators, “Everyone’s talking about honesty and dishonesty and what did you think and what was your state of mind, but you know what? At the time I didn’t think about any of it. I didn’t think about whether this was right or wrong… people go to work every day… and they do a job. And they don’t sit and think, ‘Is doing my job honest or dishonest?’ They do their job”.

If he had worked in any industry but finance, Hayes would be onto something. Most employees do not spend a lot of time parsing the ethics of their assigned tasks. They leave such hard questions to their bosses or they rely on the standard of the communities in which they work. If anyone is going to worry about great questions of right and wrong, it is the people on the top of the heap.

That upward ethical delegation doesn’t appeal to people who think conscience should be the only guide. Workers should make their own judgments of right and wrong. But the fact is that society, like companies and markets, requires a degree of conformity. People cannot live and work together without some shared moral authority. All groups, from the smallest office to the family of nations, rely on a common understanding of what is right and wrong, acceptable and unacceptable.

Law is one kind of guide to what’s right, but so are accepted customs, like the rules of the market. The latter was where Hayes placed his ethical trust. He was faithful to the customs of the Libor market, which were basically those of a wild poker game. Cheating was tolerated, as long as you did not get caught. However, as a citizen he was also bound to follow the law, which requires honest dealing. Unfortunately for Hayes, his employers ignored the difference between the internal and external standards of virtue.

Hayes broke the law, but he deserves some sympathy. What he did – trust his peers and his bosses to tell him if he was doing something wrong – generally works quite well in successful modern economies.

The behavioural standards of most employers are reasonably close to those of the wider community. It may not seem that way, since the ethical exceptions, from financial skulduggery at Enron to the possible airbag safety cover-up at auto-parts manufacturer Takata, garner so many headlines. However, these examples stand out because they are so rare. In most organisations, fairly ethical standards are the rule.

From farms to factories, in government offices and in large corporations, the behaviour that is expected is, roughly speaking, right and good. The average employee is unlikely to go too far wrong by following orders or by imitating the practices of others in similar positions.

The finance industry has been an unhappy ethical exception, as testified by the large fines paid for various illegal practices. Besides the law-breaking, there also were, and are, many perfectly legal practices which generate high incomes for insiders while leaving customers worse off. Those are at best ethically dubious.

Of course, no one is forced to work in finance. Hayes could have made a good income – while avoiding ethical and legal problems – by deploying his skills in a different career, perhaps computer programming or trading in the wholesale fish market. The freedom of career choice increases the difficulty of cleaning up the financial sector’s ethics. Many of the best potential reformers have simply avoided a business which made them uncomfortable. Others leave when they recognise the scale of the ethical problems.

In addition, many financial professionals who started out with high ethical standards are corrupted by years of doubtful practice, especially when the decision not to ask moral questions comes with such large cash rewards. Money is often powerful enough to dull consciences. If the industry really wants to become more moral, understanding employees’ divided ethical loyalties is the first step – and massive pay reductions are probably the next.

Tom Hayes was convicted of eight counts of conspiracy to defraud in a London court on Aug. 3. The crimes were connected to the pricing of Libor contracts. In sentencing him to 14 years, Justice Jeremy Cooke said: “Probity and honesty are essential as is trust… The Libor activities of which you took part puts all that in jeopardy”.

[TonyGosling]

Former UBS investment bank co-chief 'present during Libor-rigging talks'
Carsten Kengeter, who moved to Deutsche Börse in October, attended meeting where rate manipulation was discussed, court hears
http://www.theguardian.com/business/2015/jun/03/former-ubs-investment- bank-co-chief-present-libor-rigging-meeting

[TonyGosling]

Hayes Seeks to Appeal 14-Year Prison Term, Libor Conviction
September 14, 2015 — 1:30 PM BST Updated on September 14, 2015 — 3:04 PM BST
http://www.bloomberg.com/news/articles/2015-09-14/tom-hayes-seeks-to-a ppeal-14-year-jail-term-and-libor-conviction-iejwsqhk
Broker Told Prosecutors He Couldn't Ignore ‘Psychotic’ Hayes
`Ringmaster' of Libor rigging first imprisoned in scandal
Tom Hayes, the former UBS Group AG and Citigroup Inc. trader sentenced to 14 years in a U.K. prison over his role in rigging Libor, began a counter-offensive seeking to appeal both his conviction and sentence.
Hayes asked a London court Sept. 1 for permission to appeal, a court clerk said Monday. A judge will review the case and decide whether he can pursue the challenge, in a ruling that may not come for months.
Hayes was convicted in August for conspiring to manipulate the London interbank offered rate, after a London jury returned unanimous guilty verdicts on all eight charges. He is the first person to be imprisoned for rigging the interest-rate benchmark used to value more than $350 trillion of loans and securities. Eleven others await trials beginning next month.
“It’s not a surprise that Mr. Hayes is appealing the sentence given its surprising length,” said Stephen Pollard, a London-based lawyer at WilmerHale. “The Court of Appeal may embrace the opportunity to clarify sentencing parameters for these kinds of cases because there are fewer.”
Ringmaster
Prosecutors said during the nine-week trial that Hayes was the “ringmaster” of a global network of 25 traders and brokers from at least 10 firms who tried to manipulate Libor on an industrial scale. He would bribe, bully, cajole and reward his contacts for their help in skewing the benchmark, they said.
Hayes was sentenced the same day he was convicted and taken to HM Prison Wandsworth, a Victorian fortress south of the Thames known for poor conditions and violent inmates. The length of his sentence was viewed by some as an indication of the new attitude toward white-collar crime after numerous scandals tainted the reputation of London’s financial markets.
Magnus Peterson, founder of collapsed hedge fund Weavering Capital (UK) Ltd., was sentenced to a 13-year term after being convicted of fraud in January. Former UBS trader Kweku Adoboli was sentenced to a 7-year term in jail for fraud in 2012.
“Probity and honesty are essential, as is trust,” Judge Jeremy Cooke said in handing down Hayes’s sentence. He added that “the Libor activities of which you took part in put that in jeopardy.”
“A message needs to be sent to the world of banking,” Cooke said.
A spokeswoman for the U.K. Serious Fraud Office, which prosecuted the case, declined to comment. Hayes’s law firm Cartwright King declined to comment on all stories regarding the case.





The Unraveling of Tom Hayes 1 Rain Man in Trouble
http://graphics.wsj.com/libor-unraveling-tom-hayes/3

2 The Gambler
PART 3 THE U-TURN The U-Turn
4 The Waiting Game
5 The Trial
Part One
RAIN MAN IN TROUBLE
By David Enrich
ILLUSTRATION: GENTLEMAN DRAUGHTSMAN
Sept. 13, 2015
Tom Hayes paced his kitchen. He walked past the wine refrigerator and around the granite-topped island. Through the window of his seven-bedroom house, he could see the summer sun descending over the English countryside. Then he paced some more.

The 33-year-old former banker had been contemplating suicide for months. He had asked his wife if she and their toddler son would be better off with him dead. He warned her he might jump in front of a train.

That evening, he repeated another of his threats: He would drive his Mercedes off a cliff. “I’m going to do it,” he said.

Sarah Tighe had tried to be a patient wife, but the constant threats and erratic behavior were taking their toll. “Go on, then,” she snapped.

It was July 2013, and Mr. Hayes had become the global face of financial crime. If British and American prosecutors had their way, the former star trader would become one of the only bankers to go to prison for crimes committed during the financial crisis.

He had spent much of the year cooperating with British investigators. His intention was to plead guilty to charges that he masterminded an effort to manipulate one of the most important market measurements in the world—an interest-rate benchmark known as Libor.

The problem was, even after repeatedly admitting to acting dishonestly, he didn’t feel guilty. He didn’t want to testify against his alleged co-conspirators. And he couldn’t bear the thought of one day telling his son, Joshua, that he had admitted to being a criminal.

Ms. Tighe worked as a corporate lawyer, so she couldn’t keep watch over her husband all day. She dispatched her sister, Emma, to stop by the house each day to check on him. Emma secretly researched online how to rescue someone trying to hang himself.

That August, Mr. Hayes crashed his Mercedes on the way home from his favorite restaurant, KFC. Ms. Tighe wondered to a friend whether the wreck was an accident.


Former bank trader Tom Hayes and his wife, Sarah Tighe, in their yard in England. PHOTO: DANIELLA ZALCMAN FOR THE WALL STREET JOURNAL
It is unnerving to witness in high-definition the unraveling of a man’s life, even if that man is one of those pulling the thread. As a reporter for The Wall Street Journal, I had a surprisingly intimate perspective on Mr. Hayes’s growing despair. By the time of the car crash, I had been communicating with him for eight months, unbeknown to his lawyers or wife. We had dozens of clandestine meetings in train stations and rundown pubs—sometimes just after his lawyers warned him against speaking to the press.

He sent me thousands of text messages, at all hours of the day and night. Eventually his wife and other family members began confiding in me, too.

This account of the prosecution of Mr. Hayes and the toll it took on the former banker and his family is based on those conversations, and on legal documents and interviews with people involved in the case. I witnessed some scenes, and others were described to me in detail by Mr. Hayes, his wife and people close to them. I saw his family oscillate between pulling together and blowing apart. I observed Mr. Hayes, who was diagnosed as mildly autistic, swing from deep depression about his case to wild-eyed optimism that he would beat the law. And I watched in real time as Mr. Hayes took a risky U-turn that transformed him from the British government’s star witness to its chief adversary.

For a trader who always played the odds, always looked for an edge to exploit, it was a spectacular miscalculation.

Six years ago, the Hayes family was enjoying the good life. Mr. Hayes, a gifted mathematician, had discovered that banks were willing to pay a great deal for his talents. During a four-year stint in Tokyo—first for UBS Group AG, then Citigroup Inc.—he became one of the market’s elite traders, raking in hundreds of millions of dollars in revenue by trading financial products linked to Japanese interest rates. When Citigroup hired him away from UBS in late 2009, it handed him a roughly $3 million signing bonus.

He sent me thousands of text messages, at all hours of the day and night.
Mr. Hayes was odd. Colleagues nicknamed him Rain Man, for his sharp intellect and social awkwardness. At a raucous office Christmas party in 2003, he sat in a corner reading a book. When conservatively dressed Goldman Sachs Group Inc. bankers tried to hire him, he sought a contractual guarantee that he could continue wearing polo shirts to work. He had such a dandruff problem that a co-worker’s girlfriend gave him a bottle of special shampoo.

In UBS’s Tokyo office, where he sat with two computers, eight screens and two lucky panda dolls, Mr. Hayes devised an ambitious plan to help improve the odds that his and his colleagues’ trades paid off.

Many of those trades hinged on the direction of the London interbank offered rate, or Libor, a benchmark that determined the interest rates people and institutions paid on trillions of dollars of mortgages, loans and derivatives contracts. When Mr. Hayes arrived at UBS in 2006, traders were routinely nudging Libor up or down slightly to benefit their bets, a practice that UBS admitted in a later legal settlement was widespread. UBS documents gathered by prosecutors show that, with the support of his bosses, Mr. Hayes took it to a new, higher plane.

He told prosecutors he enlisted not only colleagues but rival traders and brokers. Mr. Hayes got some of them to try to push Libor in directions favorable to UBS’s trading positions. His efforts raised few eyebrows at the time.

Mr. Hayes was fired from Citigroup in September 2010 for manipulating Libor. It was less than two weeks before he and Ms. Tighe, whom he had met at a hotel swimming pool in Tokyo three years earlier, were getting married in a luxury hotel in the English countryside.

Mr. Hayes was angry but not hugely worried. It seemed like nothing more than a minor detour in his life. Adding to his comfort, prosecutors rarely targeted individual bankers for financial crimes, even in the aftermath of the global financial crisis.

Mr. Hayes enrolled in business school in England. He learned to drive. He bought his house, named the Old Rectory. He and Ms. Tighe had a baby.

Behind the scenes, though, investigations into the manipulation of Libor were gaining steam in the U.S., Britain and elsewhere. Libor’s ubiquity—its potential to touch legions of people who owed money on mortgages, credit cards or student loans—made the cases seem especially important.


Former bank trader Tom Hayes outside of a London courthouse in June. PHOTO: SUZANNE PLUNKETT/REUTERS
The morning of Dec. 11, 2012, was icy in London’s exurbs. Around 7 a.m., Mr. Hayes and Ms. Tighe were startled by a pounding on their front door. Mr. Hayes peered out a second-floor window. His curving gravel driveway was ablaze with floodlights. Ms. Tighe answered the door. A crowd of police officers entered.

Mr. Hayes padded downstairs in his underwear. An officer presented a warrant for his arrest, saying he was accused of manipulating Libor. He pronounced it “LEE-bore.”

“You mean LIE-bore?” Mr. Hayes said, correcting the officer’s pronunciation. Mr. Hayes was permitted to get dressed and have a cup of tea before being driven to a London police station. He spent most of the day pacing a tiny cell.

Twelve hours later, Mr. Hayes was released on bail. He and Ms. Tighe told themselves that everything would be cleared up once Mr. Hayes presented his side of the story—that he was doing the same thing as just about all of his peers, with the backing of his bosses. Plus, while being arrested by British investigators was scary, it was nothing compared with being charged in the U.S., where prison sentences tended to be harsher. Still, the couple was nervous enough to hire a former British spy to sweep their home for eavesdropping equipment.

Eight days later, UBS agreed to pay $1.5 billion to U.S., British and Swiss authorities to resolve criminal and civil charges of rigging Libor. Ms. Tighe printed out the settlement documents and went through them with a yellow highlighter, with Joshua balanced on her lap. She was relieved. They made it clear that Libor manipulation was widespread. Her husband wasn’t even named.

That evening, as she prepared a joint of roasted lamb for dinner, Mr. Hayes sat nearby, puttering on his Apple laptop. A news alert popped up. Mr. Hayes clicked the link. A video of the U.S. attorney general at a news conference in Washington started playing.

“Sarah, I’ve been charged by the U.S.,” Mr. Hayes announced.

It didn’t compute. “What did you say?” she asked. “What did you say?” she asked again, her voice rising to a shriek. “What did you say?”

“I’ve been charged by the U.S.,” he repeated. His face went gray. His eye started twitching.

Ms. Tighe’s legs wobbled. Then she vomited.

Part Two
THE GAMBLER
ILLUSTRATION: GENTLEMAN DRAUGHTSMAN
Sept. 14, 2015
Even as a child, Tom Hayes was obsessed with numbers. He loved their simplicity, their objectivity. Equations were beautiful.

By his teenage years, that affinity had translated into a love of gambling. Mr. Hayes grew to hate that term; to him, it suggested his winning wagers were the product of luck, not skill. He relished hunting for and exploiting weaknesses in everything from slot machines in English pubs to rival traders at the world’s biggest banks. He had a hearty appetite for risk, as long as he felt that he understood the odds.

In January 2013, charged by the U.S. government with fraud and antitrust violations, he embarked on a series of wagers that would be the riskiest and have the highest stakes of any in his life.

His priority was to avoid spending years locked up in a rough U.S. prison, thousands of miles away from his family.

For advice, Mr. Hayes turned to David Bermingham. A decade earlier, Mr. Bermingham was a London-based investment banker. One of his clients was Enron Corp. After the Houston energy company collapsed amid an accounting scandal, Mr. Bermingham and two colleagues were accused of enriching themselves as part of the fraud. Mr. Bermingham was extradited to the U.S. He pleaded guilty to wire fraud and served time in American and British prisons.

Mr. Hayes drove to Mr. Bermingham’s home in Oxfordshire. As they talked, Mr. Hayes was struck by the anger burning in Mr. Bermingham’s eyes as he recounted pleading guilty to a crime he didn’t feel he committed.

But Mr. Bermingham counseled him to find a way to resolve matters with U.S. authorities—if necessary, by pleading guilty to criminal charges. Otherwise, the threat of being locked up by the U.S. would loom over him for the rest of his life.


Tom Hayes reviewing documents related to his case at his kitchen table. PHOTO: DANIELLA ZALCMAN FOR THE WALL STREET JOURNAL
Mr. Hayes decided to cooperate with the U.K.’s Serious Fraud Office, the agency that had arrested him the prior December but hadn’t charged him. Under British law, he couldn’t be extradited to the U.S. if he was facing similar charges in the U.K.

The decision seemed sensible. After all, he said, not even his own mother—who harbored a deeply ingrained distrust of the banking industry—believed he was innocent.

“I’m so proud of you,” his wife, Sarah Tighe, texted him after dropping him off at the train station on the way to his first meeting with the SFO in late January 2013. There’s nothing to be proud of, Mr. Hayes responded, uneasy with his decision.

Now he needed the SFO to actually charge him.

Over several months, Mr. Hayes regularly trooped down to the SFO’s headquarters off London’s Trafalgar Square. To maintain secrecy, he entered the pseudonym “Stan Bowles”—borrowed from a 1970s British soccer star—into the visitor log. In a windowless interrogation room, he spent a total of 82 hours explaining finance, markets and the Libor scandal to investigators. The interviews were recorded.

Mr. Hayes admitted acting dishonestly, over and over. He had to in order to make sure he was charged.

“I probably deserve to be sitting here because, you know, I made concerted efforts to influence Libor,” he said at one point. “Although I was operating within a system…in which it was commonplace, ultimately I was someone who was a serial offender within that.”

One evening that January, I was sitting in my London apartment when my phone buzzed with a text message.

Tom Hayes
I’ll meet you tomorrow but I need to be certain I can trust you. This goes much much higher than me
It was Mr. Hayes. He had gotten my phone number from one of his business-school classmates. I had contacted her as I worked on a profile for The Wall Street Journal about the mysterious alleged ringleader of the Libor scandal. To my shock, Mr. Hayes agreed to meet me the next morning at London’s bustling Victoria station. He said he would be standing outside Burger King wearing a leather jacket.

In the morning, Mr. Hayes canceled.

Tom Hayes
I’m sorry but I can't meet today, my wife won’t allow it, it’s too risky
I failed to persuade him to reconsider.

A couple of weeks later, on a Saturday morning, I tried again. I told Mr. Hayes that one of the angles I was exploring was whether his bosses knew about and condoned what he was doing. This time, Mr. Hayes engaged. He sent a flurry of text messages that provided nuggets of information and hints about where I could find more.

The day before the profile was published, I got in touch again. As I went over the material I had gathered, he became agitated. Ever a trader, he proposed a deal: If I would leave out a few minor personal details, such as his wife’s name and occupation, he would meet me. After consulting with my editor and deciding the details weren’t essential, I accepted the trade. I doubted whether he would follow through.

The following evening, Mr. Hayes called me. He had just left a meeting with his lawyers, who had scolded him for talking to me. But he had a bargain to uphold. We agreed to meet a half-hour later at a dingy cafe outside a Tube station.

It was raining. The cafe’s windows were fogged. Mr. Hayes sat in the back corner. For 90 minutes, he talked nonstop, sometimes angry, sometimes excited, sometimes nervous. He didn’t make eye contact. He crimped a black plastic straw into an intricate design.

After he left, I stood outside in a cold drizzle, scribbling into my notebook as fast as I could. It was the start of a yearslong relationship.

Even after losing his job as a trader, Mr. Hayes kept trading. He had put the remainder of his Citigroup signing bonus, about £1 million (roughly $1.5 million), into an online brokerage account, and he spent hours trading currencies and stock indexes. His £960,000 of profits helped pay for a home renovation. After he was arrested, he called it quits. He wasn’t in the right mind-set to be trading.

Then a brokerage company, eager to land Mr. Hayes’s account, offered to match his first £5,000 of profit. He couldn’t resist; he resumed trading. He figured it would help him pay his mounting legal bills.

I don't know the odds but I know the truth.
— Tom Hayes
Mr. Hayes’s trades all went wrong. He quickly lost £100,000. Before long, he had burned through hundreds of thousands more. He asked his wife if he should cut his losses. She told him he could keep going if he thought he could recover.

One evening in March, Mr. Hayes returned home from a day of being grilled at the SFO.

“It’s gone,” he told Ms. Tighe. His account, also depleted by legal expenses, was empty. Ms. Tighe soon decided to return to work, putting on hold her plan of having another child. They started looking to sell their house.

At first, the SFO interviews were cathartic for Mr. Hayes. He enjoyed talking to a captive audience about markets and trading.

But as the SFO showed him thousands of pages of evidence, much of which he had never seen, the process inflamed his sense of injustice. Some documents confirmed that many of his peers and rivals also were trying to rig Libor. Other evidence indicated that some brokers who allegedly were part of Mr. Hayes’s conspiracy actually were lying to him about their supposed efforts to help him. Another document showed that UBS appeared to have had a policy of moving Libor based on traders’ positions. (UBS said the document wasn’t an official policy.)

He was “getting angrier and angrier,” his father, Nick Hayes, later told me. “The more he gave the interviews to the SFO, the more convinced he was of his innocence.” And the more he became obsessed with the notion that his planned guilty plea would haunt him for the rest of his life.

Mr. Hayes spent hours brooding in a cold bath and standing outside staring at a tree, sometimes in the dead of night. His driving became reckless. He spoke of suicide. “He was on the brink,” said Gemma Fordham, a family friend.

That summer, his marriage was fraying. Ms. Tighe took their son, Joshua, and temporarily moved in with her parents. She felt like she couldn’t trust her husband alone with their toddler, who was nearly two, while she traipsed into London for work.

By early July, Mr. Hayes was entertaining a radical idea: fighting the charges.

Tom Hayes
I really want to understand my options, right now I feel like I am sleepwalking the path of least resistance. I don't know the odds but I know the truth and I know that I didn't believe what I was doing was dishonest.
He increasingly wanted his day in court.

“The trader in me wants to plead guilty,” he told me in mid-August. “My gut says fight.”

Mr. Hayes went with his gut.

Part Three
THE U-TURN
ILLUSTRATION: GENTLEMAN DRAUGHTSMAN
Sept. 15, 2015
Tom Hayes came bearing big news when he arrived at his lawyers’ offices in central London in August 2013. He had decided to fight the criminal charges filed against him by the U.K.’s Serious Fraud Office.

Lydia Jonson, his lawyer at the time, delivered a blunt response.

“The SFO will crush you,” Mr. Hayes recalled her warning.

It was hard to argue with her verdict. Mr. Hayes already had submitted to 82 hours of taped interviews with the SFO, in which he repeatedly admitted to dishonestly trying to manipulate Libor. Ms. Jonson had handled Mr. Hayes’s delicate negotiations with the agency and had spent recent weeks deflecting its increasingly urgent questions about his intentions.

Mr. Hayes, however, had made up his mind.

The SFO learned in October that he was no longer cooperating, wouldn’t testify against his alleged co-conspirators and planned to plead not guilty. The agency quickly set about doing exactly what Ms. Jonson had predicted.

One of the SFO’s first moves was to narrow the scope of its criminal charges against him. The change was crucial because it meant that the U.S. and British charges against him now didn’t fully overlap. In theory, at least, it exposed Mr. Hayes to the possibility of being extradited to the U.S.—stoking his fears about winding up in a violent American prison.

Then the SFO got aggressive with Mr. Hayes’s family. One afternoon in mid-October, SFO agents showed up at the downtown London law firm where his wife, Sarah Tighe, worked. They presented her with a court order freezing her and their son’s assets. The order accused Ms. Tighe of trying to hide assets under her maiden name. Humiliated in her workplace, she had to explain to her employer why government agents had appeared in the firm’s lobby.

Mr. Hayes flew into a rage. He felt like he was being treated like a terrorist or drug dealer.

Tom Hayes
They are even saying I am transferring stuff to my son who is 2!!!!!

Tom Hayes
They are really trying to screw my wife, it’s so below the belt
Ms. Tighe had been using her maiden name all along. The SFO later said in court it had provided inaccurate information in obtaining the initial asset-freezing order, which was withdrawn.

The looming court fight energized Mr. Hayes. His depression faded. He resumed his fast-talking, aggressive manner. He was filled with renewed purpose.

There was a ton of work to do. The SFO handed over to Mr. Hayes’s lawyers more than 10,000 electronic files—emails, chat transcripts, phone calls, interview recordings, trading records, scanned printouts—that the agency had amassed in its investigation.

Mr. Hayes set up shop at his kitchen table. He stacked documents next to his son’s place mat and salt and pepper shakers. Fueled by endless cups of tea, he sifted through the documents, one by one. He built an interactive database that cataloged the mountains of evidence. The database allowed his lawyers to sort the materials by dozens of variables, including the seniority of executives involved in each piece of communication.

Then Mr. Hayes set out to figure out who had been affected by his trading and his alleged manipulation. The key was to determine who was on the other side of his trades.

This was a herculean task. Mr. Hayes executed 45,407 trades from 2006 through 2010. He went through each one. He calculated that almost all the Libor-linked trades, 99.8% of them, were with other banks. A total of 43 were with hedge funds or other asset managers. Mr. Hayes happily concluded that he hadn’t victimized any widows or orphans. Of course, that didn’t have any bearing on whether he had broken the law.


Tom Hayes leaving court in London with his lawyer, Lydia Jonson, in June 2013. PHOTO: BLOOMBERG/MATTHEW LLOYD
Meanwhile, Mr. Hayes and I were communicating more than ever. He inundated me with so many texts and phone calls that my wife suggested changing his name in my iPhone’s address book so that strangers wouldn’t see the name “Tom Hayes” flash on my screen—as it did one night at a crowded sushi restaurant.

During this period, Mr. Hayes alternated between self-doubt and cockiness. “Maybe I’m wrong and society is right and I am a criminal,” Mr. Hayes told me one day over lunch. Then he wiped the thought away.

More often, he was upbeat. He texted me in August 2014:

Tom Hayes
I am going to win this case

David Enrich
Anything new that gives you confidence?

Tom Hayes
Yes, but need to see you to talk about it.

Tom Hayes
I’m not sure it will even get to trial
Mr. Hayes’s lawyers were trying to get the case tossed. Formerly a dispassionate trader looking to win at all costs, Mr. Hayes now wasn’t sure he wanted to prevail in a technicality.

“Would rather win in court and reveal the truth,” he texted. “Even if I risk jail.”

The judge presiding over the case, a former professional rugby player named Jeremy Cooke, seemed to be losing patience with the defense.

“The time has come to give extremely robust advice to your client,” he told Mr. Hayes’s lawyers at an October 2014 court hearing. “Your client, if I understand the mentality of City traders—and I like to think I do—is probably by nature a gambler….It’s an open-and-shut case in the emails.”

Mr. Hayes texted me from the courtroom.

Tom Hayes
Judge slaughtering me, saying u should plead and have no defence

Tom Hayes
All I know is that if I lose he will throw the book at me

David Enrich
Doesn’t that worry you?

Tom Hayes
It is what it is, I have let fear dictate decisions for too long

David Enrich
Fear is a healthy defense mechanism sometimes

Tom Hayes
Yeah but fear takes away logical thought
Mr. Hayes’s team made a bold gamble of its own: It sought the judge’s recusal. It wasn’t just his “open-and-shut” statement. They noted his references to Mr. Hayes as a “gambler.” The defense felt that was pejorative.

In opposing the judge’s recusal, the SFO presented the court with copies of Mr. Hayes’s bank accounts. They were littered with entries from online gambling companies.

“That’s not gambling, that’s just arbitrage!” Mr. Hayes fumed in court.

Mr. Hayes, it turned out, had discovered an error in an online casino’s policies for paying out bonus cash. The mistake allowed new customers to virtually guarantee themselves a big profit the first time they placed a bet.

“When I realized they’d screwed the maths up, I knew this was just free money,” he told me later. He exploited the loophole over and over. Then he found similar errors on other gambling websites. That was why his bank accounts were peppered with money from casinos—and why Mr. Hayes didn’t view it as gambling.

His lawyers shushed him.

The recusal motion failed. Judge Cooke remained in charge.

Next chapter

Write to David.Enrich@wsj.com

[TonyGosling]

Tom Hayes' Libor fraud boss at UBS - who gave him the 'how to fix Libor manual - to take over the London Stock Exchange...? Frankfurt Rothschilds? All a bit too 'anarcho capitalist' and Illuminati for my liking

Save our Stock Exchange: Fightback begins to stop Germans buying the City's crown jewel
London Stock Exchange and Deutsche Boerse agreed to £21billion merger
Business leader compared the move to letting BMW be bought by a UK firm
Group could be run by Deutsche Boerse’s German boss Carsten Kengeter
And will report profits in euros instead of pounds if the deal goes ahead
By JAMES SALMON FOR THE DAILY MAIL and GERRI PEEV FOR THE DAILY MAIL

PUBLISHED: 01:36, 18 March 2016 | UPDATED: 11:43, 18 March 2016
http://www.dailymail.co.uk/news/article-3498069/SAVE-STOCK-EXCHANGE-Fi ghtback-begins-stop-Germans-buying-City-s-crown-jewel.html

Plans to sell the London Stock Exchange to the Germans are bad for Britain and must be blocked, critics warned last night.

One business leader compared the move to letting BMW be bought by a UK firm – but said this would be unimaginable given Germany’s tougher stance on foreign takeovers.

The 215-year-old London Stock Exchange and its Frankfurt-based rival Deutsche Boerse have agreed a record £21billion merger.

Talks have been going on for weeks but the details of the deal were finally announced on Wednesday. If the deal goes ahead, the combined group will be run by Deutsche Boerse’s German boss Carsten Kengeter and will even report its profits in euros instead of pounds.

Frankfurt will also have the upper hand with a 54.4 per cent stake, although the parent company will be based in London.

Business groups, including the slavishly pro-Brussels CBI, last night gave their blessing to the marriage. But there was a growing backlash from MPs and business figures, who warned it could damage the City of London, with jobs and business eventually moving to Frankfurt.

John Longworth, who was ousted as director general of the British Chambers of Commerce after daring to publicly back Brexit, led the criticism. He questioned why Ministers have refused to intervene given the London Stock Exchange’s crucial importance to the UK economy.

Mr Longworth compared the Government’s laissez-faire attitude towards foreign takeovers to the attitudes of the Germans and French. He asked: ‘Can you imagine Germany selling BMW to Britain?’

He also referred to the French government, which acted decisively once it got wind that Paris-based yoghurt maker Danone was a takeover target for US drinks giant PepsiCo in 2005.

Record: 215-year-old London Stock Exchange and its Frankfurt-based rival Deutsche Boerse agreed to merge
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Record: 215-year-old London Stock Exchange and its Frankfurt-based rival Deutsche Boerse agreed to merge

It quickly introduced a law – nicknamed the ‘Danone law’ – to protect companies in ‘strategic industries’.

Mr Longworth said: ‘I think it’s ironic that the Government says it believes it is so important that we maintain the City of London as a world centre of finance.

‘Yet they are allowing willy-nilly the acquisition of a strategic asset without any reference to competition authorities or any considerations of the impact it may have on the City.’

Deutsche Boerse’s German boss Carsten Kengeter is set to lead the group (pictured)
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Deutsche Boerse’s German boss Carsten Kengeter is set to lead the group (pictured)

The Government only has the power to intervene directly to block takeovers in the case of engineering firm Rolls-Royce and arms manufacturer BAE Systems.

But it can refer deals to the competition watchdog, the Competition and Markets Authority.

The UK has a dismal track record of protecting British firms against foreign predators. Big names to have been taken over include Cadbury and Boots.

Foreign firms have also gained control of much of the UK’s transport infrastructure and power supply.

Sir Vince Cable, the former business secretary, called on Parliament and competition authorities to vet the takeover.

He said: ‘This potentially reduces competition between the exchanges and raises a variety of genuine concerns about the effect it will have on the City of London and British business in general.’

The two exchanges have attempted to allay fears by stressing that business will not move from London to Frankfurt or vice versa. But there are concerns that this pledge could be broken if the British public votes to leave the EU in the June 23 referendum.

One MP voiced concerns that Frankfurt would not be able to resist a power grab on its junior partner in London if the UK breaks with Brussels.

Chris Leslie, former shadow chancellor, said: ‘We need reassurance from Ministers.’

Another MP questioned why London Mayor Boris Johnson has remained silent, and warned that he and Chancellor George Osborne are likely to be questioned by the Treasury Committee over the issue when they give evidence next week.

Questions: London Mayor Boris Johnson has remained silent, and warned that he and Chancellor George Osborne are likely to be questioned by the Treasury Committee over the issue when they give evidence
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Questions: London Mayor Boris Johnson has remained silent, and warned that he and Chancellor George Osborne are likely to be questioned by the Treasury Committee over the issue when they give evidence

John Mann, a Labour member of the committee, said Mr Johnson ‘claims he wants to leave the EU, yet he has remained mysteriously quiet’. The deal still has to be approved by shareholders and competition authorities.

Business lobby groups warned against ‘protectionism’. Tom Thackray of the CBI, said: ‘The most important issue for British business with this proposed takeover is the strength of the UK financial service sector so that it can support growing firms.’

A LSE spokesman said: ‘This merger will create a global player. Crucially this will be domiciled in the UK. This will not just benefit customers but support 5million British small and medium-sized companies by increasing their access to equity finance which they need to grow.’



This is economic madness by Alex Brummer

There has been a long and dishonourable history of the business world trying to hide controversial announcements by slipping them out on Budget Day when it is hoped they might go unnoticed.

But few have been quite as big and contentious as the agreement which would see London’s Stock Exchange fall into German hands.

The proposed £21 billion merger with Frankfurt-based rival Deutsche Borse has been widely condemned amid fears that influence will drain from the City of London to Germany.

For the London Stock Exchange, which was founded in a coffee house in the late 17th century, is one of the three great pillars of the City, along with the Bank of England and the insurance market Lloyd’s of London.

It is key to the financial infrastructure which has turned the City into Britain’s biggest exporter — £90 billion worth of services to the rest of the world each year.

It has survived wars against Napoleon and Hitler’s bombs to become the most valuable financial trading exchange in the world.

Hugely envied by its international rivals, over the past two decades, it has been subject to a dozen attempts from Germany, Sweden, Australia and America (by both Nasdaq and the New York Stock Exchange) to take control of it. But it has successfully repulsed them all. Until now.

Under threat: The City of London's financial expertise
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Under threat: The City of London's financial expertise

In view of its importance to Britain plc, it might have been assumed the board of the London Stock Exchange, headed by former Royal Mail and Barclays asset management chairman Donald Brydon, would have fought tooth and nail to preserve its independence.

Instead, Brydon and his fellow directors have rolled over in the face of the Deutsche blitzkrieg, claiming that the deal would be a ‘merger of equals’ designed to create a European powerhouse.

Equally shameful is the silence of politicians in the face of this potentially immense threat to the wealth-making abilities of the City of London. Surely it is the duty of our representatives at Westminster to stand up for one of the nation’s most emblematic institutions when it is confronted by an assault from abroad?

Perhaps we shouldn’t be surprised by this disgraceful inaction. Our leaders have a wretched record for accepting takeovers of great British firms by foreign companies.

For example, there was U.S.-based Kraft’s gobbling up of chocolate-maker Cadbury — leading to factory closures, the HQ being shut down and its tax domicile switched to Switzerland. Previously, there were the sales of chemist Boots to another U.S. conglomerate, TSB to a Spanish-based bank, airports operator BAA to Spanish group Ferrovial and control of our ports passed from P&O into foreign hands.

Equally shaming is the fact Britain’s future energy supplies have been entrusted to EDF, the French state-run giant which, in turn, is dependent on money from the Chinese government to build nuclear power stations here.

Call me cynical, but I am convinced that one of the reasons that Government ministers won’t get involved helping to save the London Stock Exchange is because it sits uncomfortably with their pro-EU campaigning ahead of the June referendum and their need to kow-tow to Angela Merkel’s German government.

The proposed deal highlights the huge power of the City and is eloquent proof that Brexit would not lead to Britain becoming economically and financially isolated.

After all, the Germans would not risk investing in a multi-billion-pound deal if they feared they might suffer huge losses if the British voted to leave the EU.

So we should be under no misapprehension about how damaging this takeover could be to British interests.

One fundamental reason why Deutsche Borse should be resisted is the fact shareholders in the Frankfurt exchange would have the controlling interest of more than 54.4 per cent of the stock.

The new chief executive would be a German banker, who, three years ago, came under scrutiny from the Serious Fraud Office as a possible co-conspirator in the global interest-rate-rigging scandal.

Even more humiliating, the merger would result in the Stock Exchange reporting its results in euros rather than sterling. For the London Stock Exchange to be forced to give up the British currency would be a terrible slap in the face for the nation.

But then Germany — aided by Brussels — has been determined for years to undermine the City of London in order to make Frankfurt the world’s financial capital.

History: The London Stock Exchange is 251 years old and is the world’s most convenient centre for trading shares and other financial assets. Above, King George VI visits the LSE on its 150th anniversary in 1951
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History: The London Stock Exchange is 251 years old and is the world’s most convenient centre for trading shares and other financial assets. Above, King George VI visits the LSE on its 150th anniversary in 1951

It is difficult to over-state the importance of the City of London to Britain. Located between the North American and Pacific time zones, it is the world’s most convenient centre for trading shares and other financial assets.

It is where the major investment banks, such as Goldman Sachs and Morgan Stanley, have chosen to locate their global headquarters. The big U.S., continental and Asian companies use specialist markets here to raise and trade foreign currency loans.

Most importantly, London provides an unparalleled support network of international legal firms, the big four accounting partnerships, IT expertise and top management consultants.

This takeover could threaten the very entrepreneurial culture that made the City of London such a powerhouse.

The Germans dislike the brand of Anglo-Saxon capitalism that has made London the world’s leading financial centre. Politicians and financial leaders in Berlin and Frankfurt have condemned the practices of British hedge fund traders and private equity firms — preferring more rigid control over jobs, investment and management structures.

Cut-throat buying and selling of companies, to bring about efficiencies, is anathema to them. Their working practices are one reason why Frankfurt has been suffering from the sclerotic problems of the crisis-hit eurozone.

In trying to tackle these grave problems, it has rejected free market principles and sought — with the help of Brussels — to impose a string of regulations and taxes that suffocate businesses.

There is still a chance that the merger deal will not go ahead.

Similar foreign takeover attempts have been thwarted after campaigns by British workforces, backed by the Mail.

For instance, there was the bid by EADS, now renamed Airbus Group, to take control of our leading defence company BAE Systems in a £25billion merger.

Similarly, the UK health sciences giant Astra-Zeneca (once part of ICI) famously saw off the American giant Pfizer and has gone on to thrive — investing heavily in a new research centre in Cambridge.

It would be economic murder to let the London Stock Exchange fall into German hands. If only we had patriotic politicians to lead the fight.

But, tragically, instead of defending great British institutions, they are wasting their energies trying to prop up a failed European economic system.

[Whitehall_Bin_Men]

Proposed LSE-Deutsche Börse Carsten Kengeter chief ‘faced Libor claims’
http://www.standard.co.uk/business/proposed-lsedeutsche-b-rse-carsten- kengeter-chief-faced-libor-claims-a3203611.html

MICHAEL BOW Tuesday 15 March 2016

'Former suspect': Carsten Kengeter would lead a combined LSE and Deutsche Börse should their merger complete Kai Pfaffenbach/Reuters
The London Stock Exchange’s possible £20 billion tie-up with Deutsche Börse has taken a fresh twist after it emerged the German company’s boss had caught the attention of the UK’s Serious Fraud Office (SFO) when it investigated Libor rigging.

Deutsche chief executive Carsten Kengeter, who will lead the combined company if it merges, was temporarily included in a list of potential co-conspirators alongside convicted Libor fixer Tom Hayes, according to The Wall Street Journal.

The WSJ reported that Hayes had told SFO investigators that Kengeter had participated in meetings where plans to artificially “nudge” Libor up or down took place.

Kengeter was later removed from the SFO’s list, which was turned over to Hayes’ legal team in 2013, before the case went to trial last year. Kengeter is not accused of any wrongdoing.

The German worked at UBS between 2008 and 2012, latterly as co-head of its investment bank. Hayes was a lower-level trader at UBS between 2006 and 2009.

Hayes is currently serving an 11-year prison sentence after he was found guilty on eight fraud-related charges last year.

Deutsche Börse said: “All investigations conducted both internally at UBS and by independent third parties, as well as all investigations by the authorities, identified no reasonable grounds for accusing Mr Kengeter of any wrongdoing in the matter to which you refer. There is nothing new to add to this state of affairs.”

UBS declined to comment.

The revelation adds another frisson of tension to Deutsche Börse’s looming takeover of LSE, which is being closely watched by rival suitors in the US, who could yet enter with counterbids.

LSE shares are trading at an all-time high of 2,900p as investors await an announcement of the merger, which could come within the next few days.

Kengeter is set to lead the combined group, which will be headquartered in London, while LSE’s current boss Xavier Rolet will step down.

LSE chairman Donald Brydon will remain in his role for the next three years.

The two sides are expected to announce £400 million of cost savings from the deal.

[TonyGosling]

Tom Hayes scapegoated for Libor fraud, 11 years in jail miscarriage of justice

Link

https://www.youtube.com/watch?v=lr0HAdffxUs

[TonyGosling]

City trader jailed for Libor rigging freed after five years
Tom Hayes hopes to rebuild his life and family after ‘traumatic’ time in custody
https://www.theguardian.com/business/2021/jan/29/city-trader-jailed-fo r-libor-rigging-freed-after-five-years

Tom Hayes is greeted by his son after being released from Ford open prison in West Sussex.
Tom Hayes is greeted by his son after being released from Ford open prison in West Sussex. Photograph: Chris J Ratcliffe/Getty Images
Joanna Partridge
Fri 29 Jan 2021 16.48 GMT

Tom Hayes, the City trader jailed for manipulating Libor interest rates, has been released from prison after serving what he called a “traumatic” five and a half years in custody.

The former star UBS and Citigroup trader was the first person to be convicted by a jury of rigging the financial industry benchmark and was released after serving half of his 11-year sentence.

During his trial Hayes was described as the ringleader in a vast conspiracy to fix the Libor rate – used to price trillions of pounds worth of financial products – between 2006 and 2010.

A gifted mathematician who was diagnosed with mild Asperger’s syndrome shortly before his trial, Hayes was charged by both UK and US prosecutors.

He earned millions of pounds for his work as a trader, but claimed during his trial that he was taking part in an “industry-wide” practice. He was convicted of eight counts of conspiracy to defraud.

“Today I begin the process of rebuilding my life and my shattered relationship with my son, Joshua,” Hayes told reporters.

He was met by his wife and child following his release from HMP Ford, an open prison in Arundel on England’s south coast.

“After a traumatic five and a half years in custody and two and a half years of bail, my eight-year ordeal in the UK is almost over,” he said, adding: “I’m going to enjoy my first doner kebab in a long time.”

Since his conviction in August 2015 Hayes has maintained his innocence, and has accused the UK regulator, the Financial Conduct Authority (FCA), of making him a scapegoat.

He continues to try to clear his name and have his conviction overturned through an appeal to the Criminal Cases Review Commission, which investigates suspected miscarriages of justice.


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Hayes’ lawyer, Karen Todner – who led Gary McKinnon’s case against extradition to the US on charges of computer hacking – said Hayes had been made a “scapegoat with a disability” for more senior executives. She also called on the CCRC to respond more quickly to applications.

His previous attempts to have his conviction overturned failed, although his sentence was reduced from an initial 14 years to 11.

Other traders were convicted of Libor manipulation after Hayes, including a group of four Barclays traders.

Following a string of scandals and fines totalling billions for banks that manipulated the rate, the FCA decided in 2017 to phase out Libor, and the index will stop being used this year.