Hayes told brokers to call in favours, Libor trial hears
(Please note strong language in paragraph 11)
By Anjuli Davies
LONDON (Reuters) - Tom Hayes, the former star trader on trial on alleged Libor-rigging charges, asked brokers to wine and dine traders at other banks in order to help him distort benchmark interest rates, according to evidence presented in a London court on Monday.
Hayes promised to reward brokers who used their contacts at other banks involved in the Libor-setting process through "wash" trades, where banks make fake trades to pay brokers through commissions, Southwark Crown Court heard.
"Make some efforts on Libor," Hayes told one broker in May 2009 according to a phone conversation played to the jury.
"Any favours they can call in whatever ... make sure you take the guys out for like a strip club or whatever the night before," he added.
For this particular Libor fixing, Hayes stood to make an extra $4 million if the rate went up 3 basis points, he told the broker on the call played to the jury.
The former yen derivatives trader, who worked at UBS and Citigroup , is accused of rigging the rates between 2006 and 2010 to increase his trading profits.
He has pleaded not guilty to eight counts of conspiracy to defraud. His lawyers will set out a detailed defence later in the trial, scheduled to last into August.
Brokers did not contribute to the Libor-setting process but regulators have called into question the role of individual brokers as conduits to aid manipulation by traders working at investment banks.
The London interbank offered rate, or Libor, is used to price an estimated $450 trillion of financial contracts worldwide. It is calculated through an "honour system" in which a panel of banks submit their estimated costs of borrowing from each other in different currencies.
Hayes is the first person worldwide to face a jury trial over allegations he conspired to rig the rate for profit.
In another call in late June 2009 played to the jury, in which Hayes asks a broker to ensure Libor rates are high, he tells the broker that "this is where relationships come in ... You want to f***ing take them out for dinner."
In a separate call between a broker and one of his contacts at a rate-setting bank, the court heard how the trader would be rewarded on an upcoming trip to Las Vegas for taking part in a wash trade.
"You'll be looked after in Vegas. I promise," the broker said in the call in March 2009.
"Is there any chance you'd be able to wash this switch through today?"
(Editing by Pravin Char)
