A former City trader deliberately lied about rigging Libor, a key international bank lending rate, during a police interview to ensure that he was charged in the UK and not the US, a court heard.
Tom Hayes said he could not tell Serious Fraud Office (SFO) investigators “he had done nothing wrong” because he was anxious to be charged in Britain and so avoid being extradited to face charges in a US court.
Mr Hayes, 35, of Fleet, Hampshire, denies eight charges of conspiring to manipulate Libor, the London Interbank Offered Rate, which is used to set the rate for loans and other financial deals worth trillions of pounds, while working for the Swiss bank UBS and Citigroup of the US.
Southwark Crown Court heard that Mr Hayes initially admitted the allegations to investigators in 2013, only to deny them a short while later. He was accused of carrying out a “charade” by Mukul Chawla QC, prosecuting.
“Was this all an elaborate charade between you and your lawyer, Mr Hayes?” Mr Chawla asked.
Mr Hayes said he was “following a narrative” and wanted to be charged with offences in Britain so that he did not have to stand trial in the US.
Mr Chawla said: “Back on 31 January 2013, was this was a dishonest charade between you and your lawyers?
“Please can you answer this simply – either yes it was or no it was not.”
Mr Hayes replied: “I think it was me answering questions in a way designed to optimise my chances of being charged. My goal was to get charged and I wasn’t able to answer honestly and freely in a way I would have liked because of the nature of the exercise. I would characterise it as a means to an end.”
Asked whether his lawyer had been as dishonest as he had, Mr Hayes replied: “You would probably need to ask my lawyer about that.”
“What about the message that you needed to be at that time as honest and co-operative as possible?” Mr Chawla continued.
“I can’t breach LPP [legal professional privilege] about what my lawyer told me during these practises,” Mr Hayes replied. “I understood I needed to tell the SFO a series of things in order to be charged.
“I couldn’t go in and say I’ve done nothing wrong.”
He added: “It’s very difficult for me to answer these questions without divulging what was said by my lawyer to me.”
Mr Hayes, who was a trader in yen derivatives, worked for UBS before joining the American bank Citigroup in Tokyo. He was sacked from Citigroup following an investigation into his trading methods. He returned to the UK in December 2012 and was arrested.
Mr Hayes claimed he was depressed by his predicament and believed that lying to the SFO was his “least worst option.” He also claimed he was a “political football.”
“When you arrived at UBS and started trading you didn’t know anything about Libor rigging, did you?” Mr Chawla asked.
“It was an activity that was going on,” Mr Hayes said. “I think I heard a couple of discussions about it. These were such day-to-day events."
The trial continues.