LONDON—The man accused of being the ringleader of a
global interest-rate-rigging conspiracy received a helping hand
from his boss, according to evidence presented in a London trial
Thursday.
Tom Hayes, a former UBS AG trader in Tokyo, got multiple assists
from his direct manager, Mike Pieri, to get their UBS colleagues to
move their interest-rate data to benefit Mr. Hayes's trading
positions, according to emails shown in court.
Mr. Hayes, the first person to stand trial for allegedly
manipulating the London interbank offered rate, or Libor, has
pleaded not guilty. He previously told The Wall Street Journal that
"this goes much, much higher than me." Mr. Pieri, who no longer
works for UBS, hasn't been charged but is named as one of Mr.
Hayes's alleged co-conspirators. He hasn't responded to requests
for comment.
In a series of emails to a senior UBS investment-banking
executive in London in October 2008, Mr. Pieri asked for
dispensation to move UBS's Libor data slightly lower to suit Mr.
Hayes's trades, noting that millions of dollars of potential
profits or losses hung on the decision.
"We really need some cooperation on the yen Libors from those
who input," Mr. Pieri wrote.
It isn't clear whether or how the recipient responded. But later
that day, Oct. 9, Mr. Pieri sent a follow-up email, also to senior
UBS executives, noting that he had "got some concession on this in
the end. We will be a little bit lower. Every bit helps."
The exchange triggered some dissent within UBS. Another trader,
Roger Darin, wrote to another UBS executive complaining about Mr.
Pieri's efforts. "One of the things we signed up for when UBS
agreed to join the [Libor] panel was the condition that fixing
contributions shall be made regardless of trading positions," wrote
Mr. Darin, who has been charged along with Mr. Hayes in the U.S.
with manipulating Libor. Mr. Darin hasn't entered a plea but has
sought to have the charges against him dismissed.
The fact that his boss and others knew what he was doing, and at
times appeared to help, is likely to play a significant role in Mr.
Hayes's defense, which will get under way later in the monthslong
trial.
Mukul Chawla, the lead prosecutor on the case, previously has
said that just because attempts at Libor-rigging were widespread
isn't an excuse for Mr. Hayes's alleged conduct. "Because lots of
people are doing it doesn't mean it's not fundamentally dishonest,"
Mr. Chawla said Wednesday.
Mr. Chawla on Thursday also presented evidence showing that
Goldman Sachs Group Inc. tried to hire Mr. Hayes in mid-2008.
Goldman offered to pay Mr. Hayes about $3 million, according to
internal UBS emails at the time. To retain Mr. Hayes, UBS sent him
a letter saying he was on track for a roughly $2.5 million bonus.
That package was signed off on by the head of UBS investment
bank.
The Goldman offer was previously reported by the Journal in
2013.
Mr. Hayes agreed to stay at UBS. But Mr. Chawla said that with
the financial crisis raging, he never collected the bonus he had
been told to expect.
Write to David Enrich at david.enrich@wsj.com
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