I'm not a banker but...

Tom Hayes sentenced to 14-years imprisonment for Libor fraud

This afternoon came the news that former City trader for UBS and Citi Bank, Tom Hayes, has been convicted and sentenced to 14-years imprisonment for his part in fixing the London interbank offered rate (Libor).  According to the news sites, Libor was manipulated by so many traders that one has to wonder why anybody trusted it at all.  It also begs the question why only Mr Hayes has been prosecuted when the media report that discussion of Libor fixing was rife in the City.

So, what did he do?  First, I don’t claim to be an expert in banking but so far as I understand it Libor is the interest rate at which banks lend to each other.  Each bank reports the interest rate it is paying to the British Bankers Association each morning, which then sets the Libor rate based on an average of those rates after eliminating the highest and lowest rates reported.  Because the Libor rate is used for a market worth around $10 trillion even very small shifts in the rate can have big consequences for trades made within the market.  Mr Hayes is said to have arranged with others to set the Libor rate at a particular level that would be helpful to him and his bank.

It was accepted during the trial that Libor fixing pre-dated Mr Hayes arrival at UBS but the prosecution said it got worse while he was there as a result of his activities.

For his actions, Mr Hayes has received a 14-year prison sentence, of which he will serve at least 7-years and then be released on licence for the remainder of his sentence.

I’d like to take a moment to compare and contrast this offence with others.

Last week I sat in court and watched another trial that was taking place before my case was called on.  It was an allegation that a group of 18-19 year old men had gone out together looking for another man to attack.  They found a victim, a somewhat overweight middle-aged man, and proceeded to assault him by punching him to the ground where he was kicked several times before passers-by stopped the attack.  The single defendant was convicted and released on bail pending sentence.  During his evidence, the defendant constantly referred to the victim as “the chavvy” and made it clear that he saw nothing wrong in the attack and felt as though the victim deserved to be attacked – although both victim and attacker agreed that neither knew each other.  If he goes to prison – and it’s a big if – the longest sentence he will get is six-months imprisonment for an unprovoked, planned gang attack on an entirely innocent man.  The victim told the court that as a result of the attack he had been afraid to go outside at night for some months afterwards.

Personally, I think that the violent attacker deserves immediate prison more than the fraudster.

So, what level of violence is equal to a fraud?  Gerald Baker was a teenager in the 1970s when he raped two girls, one a six-year-old and he kept raping her regularly until she was 11.  For that offence he received a 14-year prison sentence in July 2015.  But, this was not his first conviction, in the 1980s he was twice convicted for having sex with a girl under 16 and in 1998, he attacked and indecently assaulted a seven-year-old boy, an offence for which he received just three-year imprisonment.  So, it seems that a child rapist needs to have some significant convictions before he gets the same sentence as a first time fraudster.

On the 8th January 2015, Ian Montgomery had an "an extreme and violent explosion of temper" when he embarked on a “brutal, prolonged attack” on his wife of 14 years using a “using a variety of weapons, intending to kill” said HHJ Chambers QC in July 2015 when he sentenced Mr Montgomery.

Mrs Montgomery took over an hour to die from the beating and multiple stab wounds while her murderer went out to work where his colleagues described him as “calm”.

The only sentence for murder is life imprisonment; however, the judge must also set a minimum period the offender must serve before being released.  What minimum period did the justice system deem sufficient punishment for taking the life of Mrs Montgomery and leaving her to die alone knowing that help was never coming to her?  You guessed it, 14-years… the same time our banking fraudster friend received today!  Now, I know that the sentence is actually one of life imprisonment, but the minimum period must reflect the period of punishment deemed appropriate for a given offence – the rest of the life sentence is there not to punish but to protect society from the release of somebody who may still be dangerous.

I have said to clients for years that if they go out and knock their wives or girlfriends around the house, as long as they don’t kill her, they’ll never get a sentence near what they’d receive if they steal money from big business or the government – now it seems that even if they do kill her they’ll only just get the same sentence!

I’m not saying that fraudsters should never go to prison, but when we live in a society where the punishment period imposed for murder and repeat rapists are the same as those imposed on fraudsters I think we’ve taken a wrong turn somewhere.


  1. on the face of it the most obvious answer is that the sentences you quote for violent or sexual offences are too short.

  2. It has seemed for some years that human life is cheap so if you hurt, maim or kill unless its particularly gruesome and high profile you'll get a lesser sentence than for financial crimes even if you are a first time offender. We have our priorities back to front

  3. The 14 year tariff for murder needs to be compared to the 7 years the banker will serve behind bars, not the entire 14 years of his sentence. There would need to be major mitigating circumstances for a murderer to get a tariff of only 7 years.

  4. Is this not a case of your comparing apples with pears?

  5. You know he will successfully appeal the sentence as manifestly excessive.

  6. My take is that a heavy sentence was handed down as a sop to the Americans. I wonder what is going on with the so called Hound of Hounds low.

  7. Although there is not a single victim, the interest rates that Hospital trusts and Local Authorities borrow at is impacted by libor. If it is artificially inflated then that is less money for Health care and Social Care. Whixh means thousands whose nurses are a little bit more overworked, whose care package is a bit less caring, and some who may have had illnesses last longer because a mistake was made.

    At an individual level it might not be noticed much, but over the entire of society the collective pain is potentiality huge.


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