Broker went on nights to help trader Hayes, prosecutor tells London Libor trial
LONDON (Reuters) - Danny Wilkinson, a former London manager at interdealer broker ICAP, was so keen to help Tom Hayes from his first day as a UBS trader he changed the shifts of broker Darrell Read to allow the two to work together, a prosecutor told London's second Libor trial on Wednesday.
Read was put on night duty to accommodate Tokyo-based Hayes as soon as he started at UBS in 2006, prosecutor Mukul Chawla said on the second day of a trial over alleged plots to rig rates used as benchmarks for $450 trillion (£294 trillion) of global financial contracts.
Hayes was convicted on Aug. 3 of conspiring with others to manipulate yen Libor between 2006 and 2010 and sentenced to 14 years in jail. From his Tokyo base he traded in yen-denominated interest rate derivatives tied to Libor, essentially betting against other traders on the direction of rates.
"Tom Hayes starts work on Monday," Wilkinson emailed his manager Frits Vogels on Sept.29, 2006, in a document shown and read out to the jury. "So Darrell will be doing midnights from this Sunday."
Wilkinson and Read are among six former ICAP, RP Martin and Tullett Prebon employees to be tried over the alleged rigging of Libor (London interbank offered rate), designed to reflect bank borrowing costs in different currencies over various timeframes.
Vogels, who is still an executive at ICAP, did not reply to an email requesting comment. An ICAP spokeswoman declined to comment on his behalf.
The trial marks the judicial spotlight swinging to the role played by interdealer brokers such as ICAP, RP Martin and Tullett Prebon, who act as intermediaries in the financial markets.
On his first day trading from UBS's office in Tokyo on Sept. 29, 2006, Hayes also sent a computer message to Terry Farr, an RP Martin broker in London, saying: "Do me a favour today and get Libors right up. I started trading today and am long of 'em (them)".
Farr responded in an exchange shown to the jury on courtroom screens: "I'll do what I can".
TRADING POSITIONS
The prosecution alleges that former ICAP staff Wilkinson, Read and Colin Goodman, former RP Martin brokers Farr and James Gilmore and Tullett Prebon's Noel Cryan formed conspiracies with Hayes and others to manipulate for profit the rates which lie at the centre of the global financial system.
On June 28, 2007, after Read had moved to New Zealand for ICAP, he emailed Wilkinson to complain that Goodman was not taking Hayes's Libor requests into consideration when sending out daily Libor "suggestions" to his network of traders, further exchanges displayed on courtroom screens showed.
"Dan, this is serious. Tom is not happy with the way things are progressing ... Can you get hold of Colin ... and get his banks setting it (Libor) high. This is very important because he (Tom) is questioning my (and our) worth," said one email.
Wilkinson then sent the email on to Goodman, who revised his Libor predictions. "That is not just a conspiracy in action but an example of a conspiracy in action successfully," Chawla said.
Read, Goodman, Wilkinson, Farr and Gilmore are charged with one count of conspiracy to defraud with Hayes and others between 2006 and 2009. Read, Goodman and Farr face a second count of conspiracy to defraud with Hayes and others between 2009 and 2010. Cryan is charged with one count of conspiracy to defraud with Hayes and others between February 2009 and December 2009.
The six brokers, aged between 44 and 53, have pleaded not guilty. Their lawyers have not responded to requests for comment and they are expected to start laying out their defence from around mid-November in a trial scheduled to run 12 to 14 weeks.
Interdealer brokers became a focus of a global inquiry into alleged Libor rigging because of the pivotal role they play when sharing information with their networks of traders and matching buyers and sellers of bonds, currencies and swaps for which they charge a fee.
(Editing by David Holmes)
