City Trader 'Offered Contact Humongous Deal'

A City trader offered a broker a $100,000 bribe in a bid to rig a key interest rate on which trillions of dollars of financial deals are based, a court has been told.

Jurors also heard that Tom Hayes was at the centre of a multi-million dollar bidding war between rival banks because of his success as a trader.

The prosecution claims the 35-year-old was driven by "greed" and acted as a "ringmaster" in a massive fraud to manipulate the benchmark lending rate, known as Libor.

The former UBS (NYSEArca: FBGX - news) and Citigroup (NYSE: C - news) trader, of Fleet in Hampshire, is on trial for eight counts of conspiracy to defraud between 2006 and 2010, all of which he denies.

Southwark Crown Court heard that Hayes had promised to pay a contact up to $100,000 (£65,000) if he kept the Libor rate "as low as possible".

Jurors were told that, in a telephone call in 2008, Hayes told a broker: "If you keep fixes unchanged, I'll do a humongous deal with you.

"If you keep it as low as possible, I can do that. I'll, of course, support and pay you... $50,000, $100,000, whatever you want, alright? I'm a man of my word."

Prosecutor Mukul Chawla QC told the court Hayes was becoming an "increasingly dominant force" within his market by May 2008 and he was approached by another bank, Goldman Sachs (NYSE: GS-PB - news) .

Mr Chawla said: "He was offered quite a lot of money but UBS wanted to hold on to him."

An email was produced in court, dated 24 June 2008, from UBS's head of European trades, Sascha Prinz, to the investment bank's chief executive, Jerker Johansson, which described Hayes as one of his "most talented traders in Tokyo".

He wrote: "Tom Hayes is being aggressively pursued by Goldman Sachs.

"They have offered Tom a larger role with significantly more responsibility, plus a $3.2m guarantee for 2009."

Hayes's bonus at UBS for 2007 was $1.25m (£818,000), which was "on the low side of his expectations", Mr Prinz said.

He added: "I don't believe in guarantees in managing my business... but I would like to make an exception in this case and offer Tom a target letter with a target of $2.5m for 2008.

"I believe that, in conjunction with some changes in responsibilities, it would convince him to stay at UBS.

"Throughout this whole process he has behaved utterly professionally."

The court heard UBS sent Hayes a letter the next day offering him target-related pay for 2008 of 269 million yen, or £1.29m.

Mr Chawla told the jury: "Because of the financial crisis, Mr Hayes didn't receive anything like that, but that was what he was promised... just under £1.3m for that year."

The jury previously heard that Hayes had left UBS in September 2009 and joined American bank Citigroup, where he earned around £3.5m for just nine months' work in 2010.