Three men arrested in Libor rigging inquiry

The SFO opened its investigation into Libor manipulation in July after Barclays was fined £290 million by US and UK regulators

The Serious Fraud Office has made its first arrests in connection with a wide ranging probe into attempts by City traders to fix Libor interest rates.

Three British men were held after UK’s top fraud busting agency, working with City of London Police, executed search warrants at two homes in Essex and one in Surrey.

The three are understood to be Thomas Hayes, who has worked at several institutions including UBS and Citigroup, along with Terry Farr and Jim Gilmour. The latter pair are understood to work for RP Martin, a broker which facilitates trading between banks and other financial firms.

The SFO would only say that three men, aged 33, 41 and 47, were taken to a London police station in the early morning after the three properties were searched.

Libor is used to price a huge range of financial contracts, including some mortgages. It is based on an average of the rates at which various banks on a panel say they expect to pay to borrow moeny from other banks. There is a different panel for each currency.

Mr Hayes was a trader specialising in Yen, the Japanese currency. As brokers, the other two would have been in a position to pass messages between traders at different banks.

None of the firms the men worked for were prepared to comment yesterday.

The Libor scandal has now seen scores of traders across the City either disciplined or suspended or fired. 

The three men arrested aren’t directly connected to Barclays. News of its £290m settlement with regulators on both sides of the Atlantic earlier this year was what exposed the scandal.

Lurid e-mails, one of which saw a trader promising bottles of Bollinger to a colleague for attempting to fix Libor rates, were published by watchdogs which severely embarrassed the bank and ultimately led to the resignations of both its chairman Marcus Agius and its chief executive Bob Diamond.

Barclays investment banking chief Rich Ricci recently told MPs that five traders had been fired and another 13 disciplined as a result of the scandal.

The public fury over the revelations is thought to have delayed other banks from settling with watchdogs amid concern over the possible public reaction to the activities of their traders.

UBS, which has for some time been co-operating with regulators after in effect turning “state’s evidence”. It is expected to agree a penalty soon, possibly before the New Year in an attempt to draw a line under its role in the scandal. 

According to Reuters Mr Hayes has been named court documents filed by the Canadian Competition Bureau which allege that he persuaded two Royal Bank of Scotland traders in London, Brent Davies and Will Hall, to manipulate yen Libor, rates.

Mr Hayes worked at UBS from 2006 to 2009 before later moving to Citigroup where he remained until 2010. The documents also allege that he contacted traders at other banks.

The alleged involvement of the two men from RP Martin, however, did raise some eyebrows. The employee owned firm is known as a traditional City operation. “They take you to lunch and you agree to trade with them is basically how it works,” said one City source. “They’re very old school.”

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss