But that couldn’t be further from the truth since all that happened yesterday was that one man, a small player, a foot soldier, albeit a very well paid one, was scapegoated for something his bosses knew all about, and chose, for whatever reason, not to intervene.
Sentencing Mr Hayes, the judge said that he was ‘sending a message’ to other unscrupulous traders tempted to act dishonestly and pervert the global financial markets. Well if the foot soldiers are due 14 years of porridge, then if they ever get one of the big fish on the line, does that mean the death penalty would be proportionate?
Clearly I jest, and I’m sure the judge’s message is being received loud and clear by those on trading floors around the country and around the world, but there’s another message too. And this slightly more subtle communication goes higher, and tells Hayes’ managers, and his manager’s managers, that his public fall means they have been insulated from exposure to the law.
After yesterday there is little or no chance that any of the big fish will fry (or do time in jail). We will see some more traders go down for slightly lesser periods in jail, of that I am in no doubt. But to maintain the fiction that Hayes was the kingpin as the crown maintained, as well as a bumper helping of irony, this false level of sentencing has been set as the gold standard for Libor rigging.
The problem is that for this to be true we need to believe that international banking institutions have paid out billions in fines as a direct result of Tom Hayes’ actions. Hands up who believes that?
In his trial My Hayes happily accepted that he was responsible for actions that manipulated Libor so that he and his bank could benefit, however given the profits they were apparently making, it doesn’t seem credible that those in higher positions didn’t know something was up. And when you see in testimony Mr Hayes refer to his ‘managers’ managers’, you get an idea of where he was in the banking food chain.
My personal favourite that says it all, as far as how much of a badly kept secret this must have been a decade ago, was when the court heard that Hayes once said to a broker: ‘Just give the cash desk a Mars bar and they’ll set wherever you want’.
Tom Hayes may have opted for a jury of his peers as an alternative to facing 80 years in a US jail or a politically motivated SFO prosecution, but he got tarred and feathered just the same. And why?
To send a message to other foot soldiers maybe, but also to cut the losses for those above him pulling the strings.