Former UBS, Citigroup trader denies Libor rigging

17th December 2013, Comments 0 comments

A British trader pleaded not guilty on Tuesday to eight fraud charges linked to alleged manipulation of the key Libor inter-bank lending rate.

Former UBS and Citigroup trader Tom Hayes, 34, denied the charges as he appeared at Southwark Crown Court in London alongside two other defendants, Terry Farr and James Gilmour.

Hayes is the first Briton to be charged in connection with the Libor scandal which erupted in June 2012 at the British bank Barclays.

Farr and Gilmour, both former brokers with the firm RP Martin, also pleaded not guilty to the criminal charges that were filed by the Serious Fraud Office (SFO) earlier this year.

The trio will go on trial in 2015 over alleged rigging of the Libor rate, which determines a vast number of financial and interest rate contracts around the world, and other benchmark rates.

Hayes is accused of orchestrating the manipulation of Libor and other inter-bank rates amongst employees of multiple banks and brokerage firms including Citigroup, UBS, HSBC, Deutsche Bank and JP Morgan Chase between 2006 and 2010.

Other companies caught up in the scandal include the Royal Bank of Scotland, Rabobank, ICAP and RP Martin.

Britain's SFO had in June charged Hayes, who had worked for Swiss giant UBS and US bank Citigroup in London and Tokyo.

UBS was fined $1.5 billion by British, Swiss and US regulators in December 2012 for manipulating Libor.

Libor is calculated daily, using estimates from banks of their own interbank rates. However, the system has been found to be open to abuse, with some traders lying about borrowing costs to boost trading positions or make their bank seem more secure.

The benchmark rate underpins some $500 trillion of contracts, from mortgages to the cost of corporate lending.

© 2013 AFP

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