LONDON (BLOOMBERG) – Tom Hayes, the former UBS Group and Citigroup trader who became the face of the Libor rigging scandal, is set to be released on Friday (Jan 29) after nearly six years in prison.
Hayes, who served about half of an 11-year sentence, will be met by his wife after he leaves a minimum-security prison south of London. His freedoms will still be restricted by a combination of parole conditions and measures to curb the spread of Covid-19.
Hayes, 41, was the most high-profile conviction in a crackdown on the rigging of the London interbank offered rate in the wake of the financial crisis a decade ago. The key interest-rate benchmark is pegged to trillions of dollars of securities and became the subject of a global scandal after it emerged traders routinely manipulated it.
“I can’t believe it after six years,” Nick Hayes, Tom’s father, said from his home in Manchester earlier this week. He won’t be able to visit his son because of the coronavirus restrictions. “Really he’s moving out from one lockdown to another so it’s not the best time to come out of jail.”
The release is a landmark in a 13-year saga that brought shame on the banking sector on both sides of the Atlantic. By 2017, a dozen banks had paid penalties approaching US$10 billion (S$13.3 billion).
Although probes into the scandal have concluded, the financial markets will forever be tainted. A deadline to replace the discredited Libor rate is looming at the end of 2021.
Hayes was convicted in 2015 following a two-month London trial where he was found guilty of working with traders and brokers to game Libor to help his own trading positions.
He had been a star performer at UBS in Tokyo from 2006 until 2009, when he joined Citigroup. He was dismissed by the American bank less than a year later as the Libor scandal began to widen.
While in prison, Hayes took advantage of a work-release programme to get a job as an assistant at Dando Drilling International. He helped with the firm’s books, computer systems and foreign exchange, said Jacquie Jones, a project manager at Dando.
“People took to him, he was very helpful,” she said in a phone interview. “It didn’t matter what we needed doing, he was always ready to help.”
Hayes, who in his former life was called “Rain Man” by other traders, would walk between the prison and the office, rejecting rides for the freedom of the outdoors. At lunch, he was allowed to pop out for food and often opted for fish and chips.
The company, which employed around 45 people at the time, even threw a 40th birthday party for him.
“The women took a bit of a mothering role with him,” she said of Hayes, who was once teased by other traders because of his superhero bed sheets. “Our natural instinct was to look after him and make his life a bit better.”
Hayes will meet his wife Sarah and son Joshua at Dando before heading to London to see his parole officer. He’s being released on parole or licence, and will be subject to a number of conditions for the remainder of his sentence. Most convicted criminals in the UK only serve about half of their sentence.
The family lost their house, a seven-bedroom home called the Old Rectory in a leafy village outside London, to satisfy a £880,000 (S$1.6 million) confiscation order after his conviction.
The UK Serious Fraud Office closed its seven-year rate-rigging investigation in 2019 after securing three guilty verdicts and a guilty plea against bankers at Barclays. The prosecutor’s results were mixed, however, with eight people being acquitted in various Libor-related cases.
Only a handful of other bank employees have faced criminal charges globally and several of Hayes’ alleged co-conspirators were acquitted. While his court appeals were largely rejected, Hayes’ case is still being considered by the Criminal Cases Review Commission, which probes suspected miscarriages of justice.