By Anjuli Davies
LONDON, May 27 (Reuters) - Tom Hayes, a former traderaccused of conspiring to rig benchmark interest rates, abandonedan attempt to coax his step brother into aiding his alleged scamafter deciding it was wrong to ask for his help, a London courtheard on Wednesday.
On the second day of the world's first jury trial of anindividual charged with benchmark rate-rigging offences,Southwark Crown Court was played a recording of a phone callbetween Hayes, a former UBS and Citigroup trader, and former HSBC trader Peter O'Leary.
Hayes, 35, painted by prosecutors as a ringleader of aconspiracy involving around 25 staff at 10 of the world'slargest banks and brokerages to rig rates for profit, askedO'Leary to persuade an HSBC colleague to help lower Libor rates.
"If you get to know him, would be a massive help to me," thecourt heard Hayes saying. "Got $1.0 million of risk ... If ...it (the Libor rate) moves by a basis point, for my fix that'sworth 125k plus."
But Hayes, diagnosed with a mild form of Asperger's, a formof autism, and who prosecutors said handed the names of allegedaccomplices to investigators during 82 hours of interviews,later decided not to lean on family.
"I thought about it and I shouldn't have asked you, sorrymate," Hayes tells O'Leary, his step brother. "It's wrong of meto ask you a favour."
Hayes's trial comes after a seven year, global inquiry thathas led to banks and brokerages paying around $9 billion infines and sparked an overhaul of how financial benchmarks suchas Libor are policed.
Senior lawyer Mukul Chawla, prosecuting for the SeriousFraud Office (SFO), alleged emails and messages, in which Hayesdescribed requests to submit false or misleading rates as"favours", showed clear examples of deliberate rigging andconspiracy.
And he said although the practice might have been rife, thatdidn't make it acceptable.
"Because lots of people are doing it doesn't make itfundamentally honest," he said.
Libor is an average wholesale interest rate used as abenchmark to price an estimated $450 trillion of financialcontracts from derivatives to loans for households andindividuals worldwide.
Hayes, a former yen derivatives trader based in Tokyo, ischarged with eight counts of conspiracy to defraud between 2006and 2010, a criminal offence that carries a maximum jailsentence of 10 years. He has pleaded not guilty.
His defence team is expected to lay out its case next weekin a trial scheduled to last between 10 and 12 weeks. (Writing by Sinead Cruise and Kirstin Ridley; Editing by DavidHolmes)
HSBC Holdings (HSBA)
