Tom Hayes (trader)

This article is about Tom Hayes, a trader associated with the Libor scandal. For other uses, see Thomas Hayes.
Tom Hayes
Born London, United Kingdom
Nationality United Kingdom
Other names Thomas Alexander William Hayes
Alma mater University of Nottingham
Occupation Trader, consultant
Employer UBS
Known for Libor Scandal
Criminal charge Participating in Libor Scandal
Spouse(s) Sarah Tighe

Tom Hayes is a former trader for UBS and Citigroup who was arrested, tried, sentenced to fourteen years in prison for his role in the Libor Scandal, in which Libor rates were manipulated to produce favorable trading conditions.[1] His employers and prosecutors alleged that Hayes acted of his own accord, while Hayes asserted managers were aware of his actions, and even condoned them. Hayes was diagnosed with Asperger's syndrome before his trial.

Early life

Thomas Alexander WIlliam Hayes[2] was born in West London to Nicholas and Sandra Hayes, and initially grew up in Hammersmith.[3] He moved with his mother to Winchester after his parents divorced, where he was raised by his mother, and Timothy, his stepfather.[1] He attended The Westgate School, and, later, Peter Symonds College. A fellow student described him as an “incredibly smart geek”.[3]

After Peter Symonds, he attended University of Nottingham, and while there worked in a restaurant kitchen during summer breaks to pay for his tuition.[4] He graduated with a degree in mathematics and engineering, two years before Kweku Adoboli, a rogue trader who also worked for UBS.[4]

Career and education

In 2001, after time as an intern at UBS, he joined Royal Bank of Scotland's trainee program, at the interest rate derivatives desk.[1] After working for Royal Bank of Scotland as a junior trader,[5] he was headhunted by Royal Bank of Canada in 2004, and, upon moving there, he assumed greater responsibility.[1] After two years at RBS, he moved to UBS in late 2006.[4] Hayes was placed in the Tokyo office of UBS,[1] where he began making trades involving the discrepancies between the Libor rate and Japaneses interest rates.[4][6]

Hayes turned down an offer from Goldman Sachs in 2008, but in 2009, accepted an offer from Citigroup; the bank gave him a $3 million signing bonus.[6] In 2010, Hayes was fired by Citi for manipulating Libor rates. After being fired, he moved from Tokyo to England, where he day traded with his Citi bonus in order to replace his lost income.

Arrest and trial

On December 11th, 2012, Hayes was arrested by British authorities for his involvement in manipulating Libor rates, and on December 19th, he was charged by the United States for the same crime. In order to avoid extradition to and subsequent trial by and imprisonment in the U.S., Hayes initially cooperated with the Serious Fraud Office, providing eighty hours of interviews so as to be charged by the United Kingdom. After being charged, Hayes withdrew his offer of cooperation, intending instead to fight the charges levied by the SFO.[7] In response, the SFO narrowed the scope of their charges, so leaving less overlap between charges by American and British prosecutors, creating the possibility of a second trial in the United States.

During his trial, Hayes was accompanied by a court-appointed aide due to his autism. Throughout the trial, prosecutors used Hayes' SFO interviews to condemn him as greedy and corrupt. The defence attempted to illustrate that manipulation of Libor was both widespread and expected as part of Hayes' job description, with senior management as high up as the CEO aware of the tactic.

Conviction

In August of 2015, Hayes was sentenced to fourteen years in prison, to serve a minimum half of this sentence before being considered for early release.[8] The judge, Jeremy Cooke, indicated he wished to “send a signal” to traders involved in illegal trading, as the sentence was significantly harsher than those given to other individuals convicted of financial crimes, such as Nick Leeson.[8] Hayes has maintained his innocence through the trial process.[9]

Appeal

Judges, including Sir Brian Leveson, Elizabeth Gloster and John Thomas, Baron Thomas of Cwmgiedd later ruled this sentence unfair, and shortened it to eleven years, under the same parole conditions.[9][10]

Time in prison

Hayes has released letters concerning his time in prison.[11] In them, he described being held separate from other prisoners, for his protection, in a "segregation unit".[11] Hayes was placed on suicide watch, due to fears that he might engage in self-harm.

Personal life

Hayes is married to Sarah Tighe, a corporate lawyer in London. They have one child, Joshua. Hayes has mild Asperger's, which was diagnosed before his trial, at age thirty-five. He received several nicknames from his colleagues, including Rain Man and "Tommy Chocolate," in reference to his preference for hot chocolate over alcohol.[1][4][12]

See also

References

  1. 1 2 3 4 5 6 Vaughn, Liam (13 September 2015). "Was Tom Hayes Running the Biggest Financial Conspiracy in History?". Bloomberg. Retrieved 26 September 2015.
  2. ↑ Kuitenbrouwer, Peter (27 May 2015). "Tom Hayes - Libor Trial". Financial Post. Retrieved 27 December 2015.
  3. 1 2 Evans, Martin (3 August 2015). "Convicted Libor trader Tom Hayes: the self-confessed scruff 'not motivated' by money". The Telegraph. Retrieved 26 December 2015.
  4. 1 2 3 4 5 Broad, Mark (3 August 2015). "Libor trader: Who is Tom Hayes?". BBC. Retrieved 26 December 2015.
  5. ↑ Enrich, David (8 February 2013). "Rate-Rig Spotlight Falls on 'Rain Man'". The Wall Street Journal. Retrieved 26 December 2015.
  6. 1 2 Enrich, David (15 September 2015). "The Unraveling of Tom Hayes, Pt. 1: Rain Man in Trouble". The Wall Street Journal. Retrieved 26 December 2015.
  7. ↑ Enrich, David (15 September 2015). "The Unraveling of Tom Hayes, Pt. 3: The U-Turn". The Wall Street Journal. Retrieved 26 December 2015.
  8. 1 2 Economist, The (4 August 2015). "Sentenced to 14 years’ hard LIBOR". The Economist. Retrieved 26 December 2015.
  9. 1 2 Vaughan, Liam (21 December 2015). "Tom Hayes Libor Jail Sentence Cut to 11 Years, Conviction Upheld". Bloomberg. Retrieved 26 December 2015.
  10. ↑ "Trader Tom Hayes has Libor rate-rigging sentence cut to 11 years". BBC. 21 December 2015. Retrieved 26 December 2015.
  11. 1 2 Topham, Gwyn (3 January 2016). "Libor fraudster Tom Hayes describes prison life in series of letters". The Guardian. Retrieved 1 February 2016.
  12. ↑ Enrich, David (3 August 2015). "Former Trader Tom Hayes Sentenced to 14 Years for Libor Rigging". Wall Street Journal. Retrieved 26 December 2015.
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