LONDON (Reuters) - Tom Hayes, the former trader jailed for conspiracy to rig global Libor interest rates, had his sentence cut to 11 years from 14 by the Court of Appeal in London on Monday but failed to overturn his conviction.
Three senior Court of Appeal judges reduced the sentence, one of the longest prison terms on record for UK white collar crime, after considering factors such as his age, lack of seniority and his Asperger’s syndrome diagnosis.
Hayes, a 36-year-old former UBS and Citigroup derivatives trader in August became the first person convicted by a jury of Libor manipulation offences after a global investigation.
John Thomas, the head of the judiciary in England and Wales, and senior judges Brian Leveson and Elizabeth Gloster said Hayes had committed serious harm and a “deterrent element was plainly required” with his sentence. But they said the overall sentence was longer than necessary to punish him and deter others.
“However, this court must make clear to all in the financial and other markets in the City of London that conduct of this type, involving fraudulent manipulation of the markets, will result in severe sentences of considerable length which, depending on the circumstances, may be significantly greater than the present total sentence,” they said.
Hayes, who was diagnosed with mild Asperger’s syndrome shortly before his 10-week trial began in May, was found guilty of eight counts of conspiracy to defraud.
“Today I lost a battle to have my conviction in relation to Libor overturned,” Hayes said in a statement issued by the Tom Hayes Support Group. “Whilst I am immensely disappointed with this result, I am relieved and grateful that the extremely long sentence imposed on me has been reduced.”
“Whilst I have enormous respect for the criminal justice system, I continue to maintain my innocence ... I look forward to pursuing every avenue available to me to clear my name.”
Prosecutors said the former Tokyo-based trader was a ringleader in a scam between 2006-2010 to fix Libor, the London interbank offered rate, that serves as a benchmark for rates on around $450 trillion of financial contracts worldwide.
Hayes argued during his trial that he had been open about his practices, that included sending scores of emails and computer messages to others requesting help in moving yen Libor rates to benefit his trading book. He said this was endorsed by senior managers and common in the industry at the time.
In the appeal, the defense argued that High Court Judge Jeremy Cooke made legal errors in the way he handled the case and that the sentence was wrong in principle and excessive.
Lawyers said they were not surprised that Hayes had failed to overturn his conviction, with some noting that an 11-year sentence remained “substantial” for white-collar crime.
“This result clearly demonstrates that despite rumblings from Westminster of reigning in ‘banker bashing’ and recently a more holistic focus on regulators and auditors as well as financial institutions, the authorities are still very much making examples of individual banking staff,” Ben Rose, a white-collar financial crime expert at law firm Hickman & Rose, said.
A large part of the prosecution case rested on Hayes’s admissions of dishonesty to Serious Fraud Office (SFO) investigators in 2013 and 82 hours of taped, transcribed and summarized interviews presented to the jury.
Hayes said he only cooperated with the SFO because he was terrified of extradition to the United States, where he faced similar charges, and had wanted to be charged in Britain and did not truly believe he had been dishonest.
The Court of Appeal agreed with judge Cooke that Hayes’s decision to abandon the plea-bargaining deal with the SFO and seek “to explain away his admissions of dishonesty” meant he lost his chance of securing a “very much shorter sentence.”
The SFO is now pursuing confiscation proceedings against Hayes to claw back around 3.8 million pounds ($5.7 million) of alleged proceeds of crime.
Reporting by Simon Jessop; Wrting by Kirstin Ridley; Editing by David Goodman and Jane Merriman