Alleged Libor ringleader motivated by greed, trial hears

LONDON (Reuters) - Tom Hayes, a former trader on trial for allegedly conspiring to rig benchmark interest rates, has admitted to being motivated by greed and was fired by U.S. bank Citigroup in 2010, the prosecution told a London court on Tuesday.

Hayes is the first person to be prosecuted over manipulation of the London interbank offered rate (Libor) after a seven-year, global inquiry that has seen banks and brokerages pay around $9 billion in fines and sparked an overhaul of how financial benchmarks such as Libor are policed.

Opening the case for the prosecuting Serious Fraud Office (SFO), senior lawyer Mukul Chawla told the court that Hayes, 35, was at the epicentre of a conspiracy to rig Libor interest rates and admitted during 82 hours of interviews with prosecutors that he had put his trading book and pay above other concerns.

"In his own words, he was greedy," Chawla told the jury, alleging that between 2006 and 2010, Hayes set out to manipulate Libor at his bank and others on an "almost daily basis".

The former yen derivatives trader is charged with eight counts of conspiracy to defraud between 2006 and 2010, a criminal offence that carries a maximum jail sentence of 10 years.

He has pleaded not guilty and his defence team has yet to respond to the allegations in court.

The high-profile trial is expected to last 10-12 weeks and the courtroom was packed on Tuesday with members of the media taking seats in the dock, usually reserved for the accused.

Hayes, who has been diagnosed with mild Asperger's, a mild form of Autism, was given leave to sit with his solicitor, so he could more easily instruct his legal team. He sat making notes and occasionally shook his head and frowned at comments made by the prosecutor.

HALF BROTHER IMPLICATED

The SFO alleges Hayes was a central figure in a conspiracy with staff from at least 10 banks and brokers to rig Libor -- an average interest rate used to price an estimated $450 trillion of financial contracts from derivatives to loans for households and individuals worldwide.

Prosecutors allege Hayes conspired with others to request or make false or misleading submissions to benefit his own trading book, deliberately disregarding the proper basis for making submissions and prejudicing the economic interest of others.

Hayes, the prosecution said, was a highly intelligent and successful trader, with a degree in mathematics and engineering, who earned profits for UBS in Tokyo that were described as "simply enormous".

By September 2009, however, Hayes became dissatisfied with his financial reward at UBS, resigned and joined Citigroup in Tokyo after a period of gardening leave.

He started trading at Citigroup in February 2010 and re-connected with his "web of contacts" and continued his "dishonest rigging of Libor", the prosecuting lawyer alleged.

But after a complaint in June, he was sacked in December 2010, the lawyer said, without giving details. Hayes then returned to the United Kingdom and was arrested two years later.

Hours of extensive, subsequent interviews with the SFO might appear oppressive, Chawla said. But he alleged this was because Hayes volunteered he had acted dishonestly and offered evidence "against a large number of other people".

The court heard Hayes implicated traders and interdealer brokers including his half-brother, Peter O'Leary, a former trader at British bank HSBC. Reuters was unable to reach O'Leary for comment.

"He named others and he set out precisely what he had done with them," Chawla said.

But despite the evidence, documents and admissions, Chawla said Hayes was now in court because he "now claims what he was doing ... was not dishonest."

A number of those people listed in the indictment had been charged with offences and were awaiting trial. But Chawla said Hayes stood alone in court because "his actions stood apart from and above all others".

(Editing by Carmel Crimmins and Mark Potter)