Tom Hayes, a former UBS (UBSN.VX) and Citigroup (C.N) trader, allegedly conspired with 22 others to manipulate Libor benchmark interest rates, a London court heard on Monday.
The 34-year-old, who appeared alongside former RP Martin brokers Terry Farr and James Gilmour at Southwark Crown Court, was charged with eight counts of conspiracy to defraud with staff from at least 10 banks and brokerages between 2006 and 2010.
The three Britons are the first suspects to face trial in an inquiry stretching from North America to Asia into whether traders manipulated rates such as Libor, against which around $300 trillion (£185.67 trillion) worth of products, from derivatives to mortgages, are priced worldwide.
The high-profile trial will provide a test for David Green, head of Britain’s Serious Fraud Office (SFO), who has staked his reputation on the success of “top tier” investigations such as the global inquiry into the manipulation of benchmarks such as Libor (London Interbank Offered Rate).
Judge Jeremy Cooke said the indictments against Hayes and Farr had not been signed – meaning they were only in draft form – and therefore would be amended to remove the names of alleged co-conspirators. He emphasised no formal charge or complaint had been made against these other individuals.
The judge made the decision after lawyers representing some of the unnamed parties complained that their clients had only been told they would be named in court in a letter sent by the SFO on September 30.
Some of the alleged co-conspirators have not even been interviewed by the SFO, the lawyers said.
“The reasons for not having those names set out is obvious,” Judge Cooke said. “Here are people who have not been charged and may never be.”
However the indictment against Gilmour had been signed and, according to an SFO spokeswoman, does name some of the alleged co-conspirators.
Farr and Gilmour were arrested alongside Hayes in Britain last December and were later also charged with conspiracy to defraud. Katie Wheatley, a lawyer representing Farr, declined to comment. Lawyers for Gilmour and Hayes could not be reached for comment.
Hayes joined UBS in Tokyo in 2006, becoming a senior trader of interest-rate derivatives indexed to yen-denominated Libor. In late 2009, he left to join Citigroup, also in Tokyo. He left the U.S. bank less than a year later.
In its charges against Hayes, Farr and Gilmour, the SFO has named a string of top banks and interdealer-brokers with whose employees the three allegedly conspired.
These include JPMorgan (JPM.N), Deutsche Bank (DBKGn.DE), HSBC (HSBA.L), Rabobank RABN.UL, RBS (RBS.L), ICAP (IAP.L) and Tullet Prebon (TLPR.L), along with the defendants’ former employers.
The next hearing is planned for December with a trial not expected until 2015.
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Microsoft Admits Windows 10 Automatic Spying Cannot Be Stopped
Last week changes to the Windows 10 upgrade path mean it is going to become increasingly difficult for any non-techy users to avoid being pushed to Microsoft MSFT +0.00%’s new operating system. But given Windows 10 is better than Windows 7 and Windows 8, why would that be a problem? Because of policies like this…
Speaking to PC World, Microsoft Corporate Vice President Joe Belfiore explained that Windows 10 is constantly tracking how it operates and how you are using it and sending that information back to Microsoft by default. More importantly he also confirmed that, despite offering some options to turn elements of tracking off, core data collection simply cannot be stopped:
“In the cases where we’ve not provided options, we feel that those things have to do with the health of the system,” he said. “In the case of knowing that our system that we’ve created is crashing, or is having serious performance problems, we view that as so helpful to the ecosystem and so not an issue of personal privacy, that today we collect that data so that we make that experience better for everyone.”
This backs up detailed data that some had chosen to dismiss as conspiracy theories.
Windows 10 has great potential, but aggressive update and user tracking policies. Image credit: Microsoft
Still, whether or not you agree with Belfiore’s standpoint that this doesn’t invade user privacy, it does seem strange that it has taken Microsoft so long to come clean and admit core Windows 10 background data collection processes cannot be stopped. Instead it gave the impression that turning off all user accessible spying options in Windows 10 settings would provide owners with full privacy – that’s tantamount to spying.
To his credit, Belfiore does recognise the controversial nature of this decision and stresses that:
“We’re going to continue to listen to what the broad public says about these decisions, and ultimately our goal is to balance the right thing happening for the most people – really, for everyone – with complexity that comes with putting in a whole lot of control.”
Interestingly Belfiore himself won’t be around to oversee this as he is about to take a year long sabbatical. When he comes back, however, I suspect this issue will still be raging as Windows and Devices Group head Terry Myerson recently confirmed Windows 10 Enterprise users will be able to disable every single aspect of Microsoft data collection.
This comes in combination with Windows 10 Pro and Enterprise users’ ability to permanently disable automatic updates which are forced upon consumers and shows the growing divide between how Microsoft is treating consumers versus corporations.
So how concerned should users be about Windows 10’s default data collection policies? I would say very.
By default Windows 10 Home is allowed to control your bandwidth usage, install any software it wants whenever it wants (without providing detailed information on what these updates do), display ads in the Start Menu (currently it has been limited to app advertisements), send your hardware details and any changes you make to Microsoft and even log your browser history and keystrokes which the Windows End User Licence Agreement (EULA) states you allow Microsoft to use for analysis.
The good news: even if Belfiore states you cannot switch off everything, editing your privacy settings will disable the worst of these. To find them open the Start menu > Settings > Privacy.
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