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Libor rigging ‘started in 2006’

A former UBS and Citi trader on trial for Libor-rigging began his scheme to manipulate the rate in late 2006 shortly after joining UBS, a court heard yesterday.

Thomas Hayes is the first person to be tried for the Libor-rigging scandal.

He has been accused of eight counts of conspiracy to manipulate the Libor rate.

The FT reports prosecutor Mukul Chawla QC told the jury that by early 2007, Hayes was enlisting traders at JPMorgan and Royal Bank of Scotland to help him influence the rate to make his trades more profitable.

Hayes began working with Roger Darin and Joachim Ruh, then traders at UBS who had oversight of the bank’s daily Libor submission, in 2006, and with Paul Glands and Stuart Wiley at JPMorgan in early 2007, according to emails shown to the jury.

In a January 2007 email to Glands, then a derivatives trader at JPMorgan, Hayes said: “Could you do me a favour and ask your cash guys to try and keep 3m [three month] libor up today . . . thanks.”

Glands responded: “WILL DO.”

The jury was also shown evidence that the submissions made by UBS and others to the daily calculation were frequently altered after Hayes requested changes.

The court heard that Hayes would reward brokers, who acted as his middlemen by changing the suggested rates in the emails they sent to rate traders, by giving them extra commission which served as “kickbacks, bribes”, Chawla said. ‎

Hayes denies the allegations and the trial continues.

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