MercoPress. South Atlantic News Agency

Libor rate rigging trial reveals “scratch my back, I'll scratch yours” dealings among traders

In one of the electronic conversations submitted to the jury, Hayes is allegedly discussing manipulating the Libor rate with Will Hall, a trader at RBS (Pic AP)

The trader at the centre of the Libor rate-rigging trial tried to influence other banks to manipulate the key benchmark rate to suit his own trading positions, a jury at Southwark Crown Court has heard. Tom Hayes allegedly told one trader that he had managed to keep the three-month Libor rate “artificially high”.

 Hayes, 35, a former UBS and Citigroup trader, is facing eight counts of conspiracy to defraud. He denies the charges. Hayes is accused of acting in “a thoroughly dishonest manner” in his alleged attempts to rig the benchmark rate.

On the second day of the trial, the jury was presented with electronic and audio conversations between Hayes and fellow traders. In one of the electronic conversations submitted to the jury, Hayes is allegedly discussing manipulating the Libor rate with Will Hall, a trader at RBS, in February 2007.

Hayes said: “Three-month Libor is too high, 'cos I've kept it artificially high”.

He said he had managed to do this by “being mates with the cash desks - [JP Morgan] Chase and I always help each other out”.

Prosecuting QC Mukul Chawla QC said: “If you ever needed any evidence of deliberate rigging of rates, this is it. This is strategic, isn't it. It's nothing to do with the bank's borrowing rates. It's all to do with Mr Hayes' trading positions.”

The jury was also played a short telephone conversation between Mr Hayes and his stepbrother, Peter O'Leary, who had recently joined the bank HSBC. In the conversation, Hayes can be heard asking O'Leary to persuade the HSBC person submitting the yen Libor rate to keep it “on the low side” for a few days.

This would allegedly help with Hayes' trading positions.

In another exchange with a trader at a different bank, Hayes allegedly wrote: “Do me a huge favor and ask the cash guys to set one-month Libor low for the next few days. I will return the favor.”

Mr. Chawla said this was evidence of a culture of “you scratch my back, I'll scratch yours” that Mr. Hayes developed with other banks.

On Tuesday, Mr. Chawla accused Hayes, a former UBS and Citigroup trader, of being motivated by “greed” and acting as the “ringmaster” in an enormous fraud to rig the benchmark interest rate.

Libor - the London Interbank Offered Rate - is an interest rate used by banks around the world to set the price of financial products worth trillions of pounds.

Hayes was first arrested in 2012 before being formally charged in June 2013 with eight counts of conspiracy to defraud over the period 2006 to 2010.