LONDON—Former bank trader Tom Hayes's efforts to move benchmark
interest rates were so explicit and out in the open that he clearly
didn't view what he was doing as dishonest or inappropriate, his
defense team argued Tuesday.
The criminal trial of Mr. Hayes, who used to work at UBS AG and
Citigroup Inc., is in its final stages, with the case expected to
go to the jury early next week. Mr. Hayes is the first person to
stand trial for trying to manipulate the London interbank offered
rate, or Libor, and is accused by British prosecutors of eight
counts of conspiring to commit fraud.
"What does the word 'conspiracy' conjure up to you?" Mr. Hayes's
lead defense lawyer, Neil Hawes, asked the jury in his closing
statement. "It sounds like something secret and quiet and discrete…
There's nothing covert, underhanded or discrete, at all," about how
Mr. Hayes communicated.
Instead, Mr. Hawes asserted, "it's more Austin Powers, isn't it,
than James Bond?"
Earlier Tuesday, prosecutors arguing the case on behalf of the
Serious Fraud Office closed their case by going back through dozens
of pieces of evidence in which Mr. Hayes bombarded colleagues,
rival traders and brokers with requests to move Libor up or down to
suit his trading positions.
The lead prosecutor, Mukul Chawla, argued that Mr. Hayes was
acting dishonestly and dismissed the former trader's argument that
his behavior was acceptable because his bosses knew about and
condoned what he was doing. That isn't an excuse for dishonest
conduct, Mr. Chawla said.
"No one has thrown Mr. Hayes under the bus. No one forced him to
rig Libor. No one forced him to talk to traders at other banks… No
one forced him to make bribes," Mr. Chawla said. "That was all his
doing."
"In blaming everyone else, what he does not do is take any
personal responsibility for his actions," Mr. Chawla said.
Mr. Hayes scowled, furrowed his brow and shook his head.
The prosecution's case against Mr. Hayes is built not only on
hundreds of emails, chat transcripts and phone recordings that show
him trying to get Libor moved up or down, but also on 82 hours of
recorded interviews he gave to the SFO in 2013 in which he admitted
his guilt. Mr. Hayes now says he made those admissions because he
was desperate to get charged by British authorities and avoid
extradition to the U.S., which charged him with Libor-related
crimes in late 2012.
"He does not have the strength of character" to stand by
statements he made to the SFO, Mr. Chawla said.
But a key piece of evidence bolstering the defense emerged late
last week. In an unusual instance of cross-courtroom cooperation,
Messrs. Hawes and Chawla jointly read aloud an interview that a
former UBS trader, Panagiotis Koutsogiannis, previously gave to
British regulators. In that interview, Mr. Koutsogiannis, nicknamed
"Pete the Greek," echoed Mr. Hayes's arguments about the widespread
perception that it was acceptable for traders to slightly skew
Libor within a certain range of numbers.
On Tuesday, Mr. Chawla criticized Mr. Koutsogiannis for refusing
to show up in court to be cross-examined. He said Mr.
Koutsogiannis, who is in an undisclosed overseas location, was
trying to "manipulate" the court by refusing to testify and said
jurors therefore should discount his evidence. "What's he afraid
of?" Mr. Chawla asked.
Mr. Koutsogiannis couldn't be reached for comment.
Write to David Enrich at david.enrich@wsj.com
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