Court Refuses to Overturn Criminal Conviction of Ex-UBS/Citigroup Trader

In the U.K., a panel for the Court of Appeal refused to overturn the criminal conviction of ex-UBS (UBS) and Citigroup (C) trader. Tom Hayes is behind bars for conspiring to rig Libor. However, while his conviction will stand, the panel did lower his criminal sentence from 14 years to 11 years, citing his non-managerial role at the two banks and his diagnosis of mild Asperger’s.

Hayes is considered the main leader, spurring dozens of traders to manipulate the London interbank offered rate. However, his lawyers claim that Hayes did not hide his conduct from others at the bank and never considered his actions dishonest. Hayes said that his behavior was common in his industry.

When he voluntarily testified before prosecutors, Hayes admitted to manipulating rates. He also testified against a number of ex-friends and colleagues. Hayes also is facing criminal charges in the U.S.

Libor helps shape the borrowing costs for trillions of dollars in loans. Banks set rates, including Libor, by turning in rates at which they would be willing to lend each other money in different currencies and at different maturities.

The collusion among traders at different banks to rig Libor eventually led to a global probe and billions of dollars in fines against some of the biggest banks in the world, including UBS, Barclays (BARC), Deutsche Bank (DB), and Royal Bank of Scotland (RBS). Over a dozen people have been charged in the Libor rigging probe.

Last week, British authorities said they had begun proceedings against another banker, Société Générale employee Stephane Esper. Conspiracy to defraud charges are also expected against former and current Deutsche Bank and Barclays employees next month. In 2013, Société Générale was fined $1.8B by the European Union to resolve charges accusing the bank of colluding to rig benchmark interest rates.