Convicted white-collar criminals can normally hope to spend their time inside in low-security prisons reserved for non-violent offenders. But the reality was starkly different for former City trader Tom Hayes, who received a 14-year prison sentence at Southwark Crown Court in August 2015 for his role in the Libor interest rate rigging scandal.
At one stage he found himself sharing a cell at maximum security HMP Belmarsh, not with fellow middle-class fraudsters, but with “two guys who had assassinated someone with a Mac-10 machine gun”.
The unlikely trio were locked up together for 23 hours a day, his cellmates watching “terrible television” round the clock. Eventually Hayes plucked up the courage to ask for a turn on the remote. “They came back and said I could watch half an hour a night. For my first half hour I chose Have I Got News For You.” It is safe to say his cellmates were “unimpressed by Paul Merton and Ian Hislop”.
It is just one of the extraordinary recollections of the 45-year-old former UBS and Citibank trader who was handed one of the toughest penalties for white-collar crime in British criminal justice history. After losing at the Court of Appeal last year he is now turning to the Supreme Court for a final shot at redemption.
Hayes admits he spent much of his time behind bars — five and a half years in total — burning with rage at his downfall.
Maybe I was naïve, but right up until the very end I thought I would be acquitted
The charges against him stemmed from his work in Tokyo as an interest rate derivatives trader for Swiss bank UBS, between August 2006 and September 2009, and then at Citibank until September 2010.
Hayes was charged with, and then convicted of, eight counts of conspiracy to defraud by unlawfully manipulating the yen Libor (London Interbank Offered Rate), an interest rate set daily after submissions by big banks on their expected borrowing charges.
The criminal indictment arrived in 2013, but came squarely on the back of the 2008 global economic crash and the feverish “let’s hang the bankers” atmosphere that followed, he says.
At the centre of his appeal is an argument that the judge wrongly told jurors that Hayes’s Libor submissions could not seek a commercial advantage for his bank and — at the same time — be within the rules.
There is palpable anger from Hayes when he talks of how “ignorant” politicians viscerally turned the public against the banking industry after the financial crash, describing it as a “witch trial”.
“People like to blame somebody for something. And nobody really got blamed for 2008. There was rightful anger about that — but they were looking in the wrong place.” He told The Standard: “My brokers actually used to get in trouble for not taking me out enough, for not doing enough entertaining”. Hayes says his life was a world away from the “Wolf of Wall Street” cliché of “hookers, champagne and cocaine”. Hayes once asked to go to KFC when offered his choice of London fine dining and insists most days, “I went home early, had a bath and a glass of orange juice, and went to bed.”
He grew up in Chiswick, west London, his parents divorced when he was four-years-old, and he was uprooted at 12 to live in Winchester in Hampshire.
A prodigious talent for maths at primary school allowed him to race through textbooks for older children. He appreciated the “great certainty” that the subject offers. “There's no ambiguity in numbers”, he said, before bristling at a E grade he once received for a history essay. “It seemed so unjust because I thought I was completely just in making the arguments that I'd made – but I can't argue with that grade because it's a subjective grade. In maths, you don't get subjectivity.”
At the end of his first year at Nottingham University, Hayes was pouring pints at a private members’ tennis club and saddled with a sizeable student overdraft. He needed money and got his first taste of finance with an internship at UBS.
Lessons from prison
Hayes has been diagnosed with mild Asperger’s syndrome and gained unkind nicknames such as “Rain Man” and “Kid Aspergers” from trading floor colleagues, who also dubbed him “Tommy Chocolate” owing to his fondness for a hot chocolate instead of a lunchtime pint.
His habit of wearing the same clothes for days on end after a particularly successful trade, hoping to keep that lucky streak going, had the unfortunate effect of making him look like a “tramp” — despite making a small fortune in wages and commissions. “I’d look like I’d been dragged through a hedge backwards,” he says.
Hayes enjoyed the mathematical certainty of finance, and says he constantly sought “approval from my manager” although this was measured in his profit and loss account.
At trial, this was turned against him, as prosecutors painted him simply as someone with a “desire to earn and make as much money as he could”.
Hayes knows he made mistakes during his trial. He asked to be tried alone, rather than alongside the other traders accused of being part of the same conspiracy. They were all cleared at their own trial. “That was a big, big, big mistake,” he says, looking to the floor.
And he accepts he did himself few favours in the witness box in front of the jury. “I was so angry about what happened to me,” he says. “That made me an angry witness and a defensive witness, and not a very likable witness.” He adds: “I wish maybe I'd been more human in front of the jury. I don't think I came across as a sympathetic figure.”
Hayes was also hamstrung by the fact he had initially co-operated with investigators, sitting down for 82 hours of interviews which were later used against him. He was, he says, in a “mentally broken state” and did anything he could to avoid being extradited to the US, where separate charges had been filed. But the damage had been done to the presentation of his case when it came before a London jury.
In an hour-and-a-half talking to The London Standard, Hayes slows down when recalling the moment the jury foreman repeated the word “guilty” eight times, and he realised for the first time that a lengthy prison stretch was coming.
“Maybe I was naïve, but right up until the very end I thought that I would be acquitted,” he says. He had even been researching holiday destinations as the jury deliberated. “I thought that this was just a big misunderstanding and it needed to be explained”, he said. But guilty verdicts were delivered on a Monday afternoon in August 2015 after two and a half years on bail. Hayes was given just 30 minutes to say his goodbyes before Mr Justice Cooke jailed him.
“That sentencing was cruel. It was cruel in the way that he did it”, he said. “I remember standing in this little room and just feeling so stressed out. I didn't know what my sentence was going to be. My sister was there, she was crying.” He believes the way the sentence was handed out so quickly was toughest on his son, Joshua, then three, whom he had dropped off at nursery only that morning. His wife Sarah had to explain that evening that Hayes would not be around because of “something he had done at work”.
Hayes' gradual yet dramatic slide into the abyss took him from a comfortable family life and a well-paid job in the financial industry to sharing a prison cell with two other men at maximum-security Belmarsh Prison. For a man who relied on certainty in his daily life, there was little he could be sure of anymore. “Every time someone said to me, that will never happen, or this is the worst case, it got worse than the worst case and it did happen”, he says, rattling through a stream of broken reassurances as he lost his job, a regulatory inquiry turned into a criminal probe, charges were laid in two countries, and ultimately he was handed double the seven-year sentence he had been warned about.
Hayes says he dealt with prison in 24-hour blocks, thinking, “can I get through the day?” As well as his TV-addicted cellmates, Hayes got to know and indeed became friendly with Danny Jones, one of the “Diamond Wheezers” Hatton Garden burglars, as they packed tea together. Jones turned to him for “smart legal ideas” that he might be able to use in the next criminal case he faced.
And Hayes came across one of the terrorists who plotted to blow up an airliner with liquid explosives disguised as soft drinks. He was “very well read, very bright” after a decade in prison, and still extremely devoted to his faith. “But he wasn’t what I would describe as an extremist any more,” he adds, matter-of-factly. “I mean, who am I to say? But I actually liked him.”
He is candid about mixing with robbers and murderers, and making real friends, to the point of going back to jail to visit some who remain incarcerated.
“You cannot in prison judge people by what they’re in for, because otherwise you wouldn’t speak to anybody. Nobody wants to be judged by the worst act in their life.”
Hayes has found solace over the years with stories about miscarriages of justice. The first book he managed to read behind bars was Amanda Knox’s Waiting to be Heard, detailing her own journey through the Italian justice system while accused of Meredith Kercher’s murder.
Hayes got in touch with Knox after regaining his freedom to thank her for the inspiration. They now swap occasional messages and he hopes to be exonerated as she was.
He says he complained stridently while locked up, battling for every right that he could scrape. Hayes’s now ex-wife Sarah, a corporate lawyer, was by his side throughout the criminal trial, including the dramatic moment when he was sentenced to 14 years. “We’ll appeal”, she mouthed across the courtroom, and the sentence was later cut to 11 years. But as he was nearing the end of his time in prison, Sarah broke the news that their marriage was over.
“It was a crushing thing for me because I always thought I’m going back to my home, I’m going back to my son, I’m going back to my wife,” he says.
“That was my beacon of hope … And then suddenly with about 15 months of my sentence left, I had this new reality.”
Righteous anger
Hayes was released in January 2021, having recently also been diagnosed with multiple sclerosis. His banking wealth was seized as proceeds of crime. He is now living in his parents’ property in Maida Vale, west London.
He has focused on rebuilding his relationship with his son, taking him to watch QPR play each week and reconnecting with nature.
“Just going down to the beach in St Ives, feeling the sand underneath my feet, seeing those crashing waves … When you’ve been stuck in a concrete box for five and a half years that’s been very healing.”
Hayes says he still battles every day with anger, but adds hopefully: “I’m much calmer now, much less angry now than I was at my most extreme points. I think I have righteous anger now.” A conversion to Christianity in prison has helped. At first he used religion to get away from the jailhouse noise for a while, but it’s now a true devotion.
Hayes has taken to online dating since the separation from Sarah, but he also has pessimistic calculations of his odds of finding a match: 75 per cent put off by the “drama” of his life, and 12.5 per cent he must turn down because they think an ex-con is “really cool”.
“I’m selling myself: ‘Come out of prison after five and a half years, in therapy, quite mentally broken, living in my parents’ flat. I’ve had all my assets stolen. I’m on the autism spectrum, I’ve just been diagnosed with multiple sclerosis.’ Oh yeah, that’s my CV.
“I’m fishing in my small pond with a rod that’s broken, and bait that’s not very good.”
His Supreme Court appeal comes after a referral from the Criminal Cases Review Commission, which concluded there was a reasonable chance of the convictions being overturned. He had seen his colleagues cleared at their trial — “I was in a conspiracy of one,” he rues. Traders who were found guilty of Libor rigging in the US had their convictions quashed by the courts, who agreed with a point Hayes makes: attempting to gain a commercial advantage within the system doesn’t add up to a crime.
His appeal starts on Tuesday, and when the court returns a decision Hayes hopes he has something a little brighter to tell those online dates and new acquaintances.
But win or lose in the courts, he will always carry the trauma of becoming the human face of the financial crash.
