On 3 August 2015, Mr Justice Cook sentenced Tom Hayes, the former UBS and Citibank trader, to 14 years imprisonment having been convicted by a jury of eight counts of conspiracy to defraud.
As such, Mr Hayes became the first banker to be convicted after trial for wrongdoing arising out of the alleged manipulation of the LIBOR rate. 11 other people await trial in late 2015, and in early 2016 another person pleaded guilty in October 2014.
Although the sentence imposed on Mr Hayes appears high when compared with other “white collar” criminals, every case must be judged on its own facts, and the sentence in this case may not be indicative of sentences to be imposed generally on others convicted of similar offences.
There were three significant factors that contributed to the way in which the Court arrived at the sentence passed on Mr Hayes:
- The impact of the Sentencing Council’s Definitive Guidance;
- The fact that the Judge imposed partly consecutive terms of imprisonment;
- The fact that Mr Hayes withdrew from an assisting defender agreement previously reached with the SFO under the provisions of the Serious Organise Crime and Police Act 2005 (SOCPA).
The Sentencing Council’s Definitive Guidelines only took effect on 1 October 2014, after Mr Hayes had withdrawn from his SOCPA agreement. This may have led to a critical error from Mr Hayes. Whilst previously sentencing for conspiracy to defraud was reliant on a patchwork of previous precedents, the Judge in this case was required to follow the Guidelines and in particular to assess Mr Hayes’s culpability, and the harm his defending had caused.
Mr Hayes’ offending spanned two periods, firstly between 2006 and 2009 whilst he was at UBS, and then from December 2009 to September 2010 whilst at Citibank.
The Judge viewed these as two separate series of offending and therefore ordered that the sentences imposed for each period should be served consecutive to each other rather than concurrently. Had all sentences run concurrently, Mr Hayes would have been sentenced to a total of nine and a half years in custody. However, having directed that the UBS sentences should be run consecutively to those imposed for the wrongdoing at Citibank, the total sentence was increased to 14 years. Ordinarily, Mr Hayes will not be entitled to parole until he has served half of his sentence, which means he may serve at least seven years in custody before being eligible for release.
Whilst the withdrawal from the SOCPA agreement did not increase the sentence imposed by the Judge, plainly the Court was unimpressed by the way in which it viewed Mr Hayes as having tried to manipulate the system and, undoubtedly, this was reflected by the fact that the Court did not allow any reduction of the sentence that might normally have been granted.
Having withdrawn from the SOCPA agreement and then having maintained a not guilty plea throughout the trial, Mr Hayes gambled that a jury would accept his defence that his conduct amounted to no more than what many others were doing. The jury unanimously rejected that defence and Mr Hayes appears to have been left to pay a high price for a gamble that failed.
He does, however, have one more throw of the dice, and given the history of the case to date it can be reasonably expected that he will appeal. However, the test on appeal is high and he will need to satisfy the Court of Appeal that the sentence imposed by Mr Justice Cook was manifestly excessive.
If you, or your organisation, is being investigated for fraud you will need expert legal advice. The Business Solicitors at Slater and Gordon can help so call us on freephone 0808 175 7722 or contact us online and we will call you.