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Libor trader Hayes tells court he used spread-betting gains to buy house
March 16, 2016 / 8:47 PM / 2 years ago

Libor trader Hayes tells court he used spread-betting gains to buy house

LONDON (Reuters) - Tom Hayes, the former trader serving an 11-year jail sentence for conspiracy to rig Libor interest rates, told a London court on Wednesday that he had paid for about half of his seven-bedroom country house with cash earned privately from spread-betting.

Former trader Tom Hayes arrives at Southwark Crown Court in London, Britain, August 3, 2015. REUTERS/Peter Nicholls

Britain’s Serious Fraud Office (SFO), which is seeking to recover alleged proceeds of crime, argued that Hayes bought his country house in southern England with part of 2.45 million pounds ($3.45 million) of bonuses he earned while at UBS (UBSG.S) and Citigroup (C.N) in Tokyo between 2006 and 2010.

“A large part came out of my (private) trading,” Hayes told the Old Bailey criminal court.

Hayes, unshaven and visibly thinner than before he was jailed, said that he had returned to England and became a private trader after he had been fired by Citigroup in 2010.

“Basically, probably about half of the funds came out of spread-betting. It’s very hard to delineate,” he said.

Hayes, 36, was convicted last August for conspiracy to rig the London interbank offered rate (Libor), a benchmark for rates on about $450 trillion of financial contracts worldwide.

The SFO is seeking to recover at least the value of Hayes’ UBS and Citigroup bonuses.

The former trader’s lawyer, Christpher Convey, earlier cross-examined an officer of the SFO on why there had been no attempt to strip out dishonest Libor-related dealings from honest earnings.

SFO financial investigator Richard Stone, called as a witness for the prosecution, told the court he had not seen material that might have shown to what extent Hayes’ requests to nudge Libor rates in his favour had affected his profits.

“This was not material that was available to us,” Stone said.

During the Hayes trial last year, the SFO relied on 82 hours of interviews with the former trader in 2013, when he was cooperating with investigators and admitted dishonesty in an effort to be charged in Britain and avoid U.S. extradition, where he faced similar fraud-related charges.

Convey said on Wednesday that Hayes had told the SFO in 2013 during those interviews that dishonest Libor activities only affected around five percent of his trades‎. But in the confiscation hearings, the SFO was ignoring his estimate.

“It begins to sound like when Mr Hayes says something to assist your case you accept it, but when he doesn’t you do not accept it,” Convey said.

($1 = 0.7096 pounds)

Editing by David Goodman and David Evans

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