Friday, August 21, 2015

British Embassy to re-open in Tehran – Now is the time to reopen liaison between Iran and the Financial Action Task Force.

It is wonderful news that the British Embassy is to reopen in Tehran. In saying this, I must declare an interest to state that I have been very fortunate to have travelled to Tehran on 2 occasions, and to have enjoyed the hospitality of my Iranian hosts within the banking sector.

I was invited to Tehran to teach anti-money laundering best practice to Bank Saderat staff, and the visit proved to be so positive and open-handed that I was invited to return to teach a large number of Iranian bank staff from all over the country.

The success of these visits, and the initiatives that flowed therefrom were subsequently deliberately undermined by American agents with close ties to Israel who did not want Iran to be perceived to be trying to provide full compliance with international anti-money laundering initiatives.

The reopening of Britain's embassy in Tehran will now consolidate the normalisation of relations after a very bumpy period. 

While relations were not formally broken off, they were reduced to the lowest level possible. 

Ties have slowly been warming but it is clearly the successful conclusion of the nuclear accord with Iran that has paved the way for the embassy reopening. 

A number of other European countries have already sent ministers and trade delegations hotfoot to Tehran in the wake of the nuclear deal. The hope now is that better diplomatic ties and stronger economic links might help to bolster more reform-minded elements in the Iranian leadership and open up Iranian society to new pressures for change. 

One of the earliest changes I hope will take place will be a re-opening and re-negotiation of Iran’s relationship with the Financial Action task Force, the international body designated to oversee global anti-money laundering best practice standards.

In late 2007, the FATF had made a series of public pronouncements dealing with its relations with Iran, and its concern with a perceived lack of good compliance by Iran with accepted global standards of best practice, and threatening further interventionist action.

Early In 2008 I was contracted by the Iranian Bank Saderat to teach anti-money laundering best practice to Iranian bankers, my first visit covering a 5 day period during which I lectured to about 100 practitioners. 

The banking response to this visit was to invite me back to lecture again to about 800 bankers from all over the country. I was inundated by a very large number of decent men and women, all of whom wanted to be educated in global aml systems and controls in a 'best practice' model, and who wished to be 100% globally compliant with FATF requirements.

 At the end of my visits, I became the willing intermediary between the Central Bank of Iran and the FATF in Paris, during which I encouraged and later facilitated the first visit of an Iranian delegation to the FATF.  

I was asked to interpret an FATF letter to the Iranian Government dealing with AML compliance and I was happy to be able to draft a response to be sent by Iran to Paris, responding positively to an invitation to engage with the FATF.

Subsequently, I was invited to attend the meeting in Paris as a consultant to the Iranian delegation, although I was not allowed to attend the Plenary meeting, the only attendees being Government and FATF officials and invitees. 

I was able to be present at the post meeting discussion with the Iranian delegates and to advise on the outcomes. I was therefore a witness to the entire process with the exception of the plenary meeting itself, the entire contents of which were subsequently reported to me by the Iranians and FATF staffers.

During this visit, the Iranians were able to demonstrate their working model of aml interdiction, and they left this very cordial and helpful meeting with the knowledge of how their requirements would need to be increased and further developed.

So successful was this meeting that it resulted in an invitation to return to Paris for working meetings with FATF professionals and staffers, at which I would have been permitted to be present, to further develop their methodologies along the correct lines. 

As a direct result of this thawing of relations between Iran and the FATF, the agency made a public announcement on 28th February 2008, that it did not intend to take any further AML/CTF interventionist action against Iran, following the publication of its earlier notice in October 2007.

The FATF notice stated;

“…Since its October 2007 Plenary meeting, the FATF has engaged with Iran and welcomes the commitment made by Iran to improve its AML/CFT regime. Consistent with its Statement on Iran, dated 11 October 2007, the FATF confirms its call to its members and urges all jurisdictions to advise their financial institutions to take the risk arising from the deficiencies in Iran’s AML/CFT regime into account for enhanced due diligence. Iran is encouraged to continue its engagement with the FATF and the international community to address, on an urgent basis, its AML/CFT deficiencies...”

The FATF specifically recognized therefore the commitment made by Iran to improve its AML regime and encouraged it to continue the same. The FATF had the power to impose other sanctions against Iran, but because of its open and transparent cooperation with the FATF, it has chosen not to alter the existing situation, and would continue to work with Iran to remedy all deficiencies.

However, this state of affairs had not satisfied those officials in the US Government who had close ties to the State of Israel and whose ambitions were to harm Iran at every possible opportunity. 

No sooner had the likelihood of Iran’s improving relations become apparent, then the Americans commenced a whole programme of deliberate untruths, downright lies and cynical disinformation which was planted in the US press, which completely spun a whole new interpretation on the facts of and the reasons for the Paris visit. 

On Saturday 16th February 2008, the International Press Agencies all began carrying reports of a ‘secret’ meeting held between US and Iranian officals in Paris earlier in January.

Depending upon which agency you read determined what story you received, but suffice it to say that the majority of the articles carried by the US agencies all placed a major US ‘spin’ on the piece.

Take this as a typical example from the Kansas City Star;

“US secretly met Iran banking officials”

‘…A US official met secretly with Iranian banking officials and senior government aides who oppose punishing the Islamic nation for not doing enough to stop money laundering and terrorism funding…

The United States was represented by Daniel Glaser, the Treasury Department’s deputy assistant secretary for terrorist financing and financial crimes…The meeting was part of the Bush administration’s attempts to ramp up international pressure on Iran to halt atomic activities that could lead to the development of nuclear weapons…’

No mention was made of the real reason for the Paris meeting, or the Iranian initiatives in seeking to become more compliant with global initiatives.

The way this story was reported placed a wholly inaccurate interpretation on the events, and attempted to portray the US’s part in these events in a fictitious light. It was yet another example of the way that the US Treasury continued to disseminate a stream of disinformation about Iranian affairs, particularly Iranian banking and financial affairs, as part of a deliberate US policy to destabilise the Iranian state and its internal economic policies. 

As the Kansas City Star stated quite openly;

‘…Washington has boasted that the US and existing UN sanctions, have taken a significant toll on Iran’s economy, particularly on its unemployment and inflation rates and raised pressure on the Government…’

The real FATF meeting in Paris was co-chaired by the Italian representative and the US representative, Daniel Glaser. Quite why the US representative was chosen to chair this delicate meeting is not clear, his political leanings should have made it obvious that he should not have played a leading role.. 

The meeting was reported to be cordial, focused and covered a wide range of issues. The Americans it was reported, played no particularly significant part over any other participant, nor was the meeting anything to do with any policy initiatives on their part, either in Paris or elsewhere. They were merely present at the meeting in the same way as the other FATF representatives, all of whom would have expected the meetings to be kept confidential.

At this time, agents of the US Treasury were in Europe, seeking to bring significant economic pressure on the Iranian banking community by threatening other banks and international businesses who had business with Iran that the US would seek to impose draconian penalties on those entities if they continued to do business with Iran. 

The pressure for these unfair activities had been directed from and by agents of the office of Stuart Levey, the then US Under Secretary for Terrorism and Financial Intelligence. By focusing on the tactics of pressurizing foreign companies who traded or dealt with Iran to drop their business activities, Levey and his team engaged in a wide range of activities designed to bring financial and commercial pressure on Iran. Their aim was to bring about a revolution from within Iran by so destabilizing the economy of the country that regime change would be effected through a popular revolution.

In view of the proximity of Mr Glaser to Mr Levey, it might have been thought obvious that the Iranians might not unreasonably feel that their own transparent deliberations with the FATF were being wholly undermined by Mr Glaser’s position as co-chair of the meetings, as he was a direct satrap of the very official who was doing everything he could to unfairly undermine the Iranian economy.

It is surely no accident that having observed the willing acceptance by Iran of the FATF invitation to enter multilateral discussions, followed by an even more recent announcement of the passing of the Iranian law outlawing money laundering, that the Americans could easily see that their widely trumpeted allegations of Iranian regulatory non-compliance would now begin to ring a bit hollow. 

Hence, the sudden outburst of articles all claiming US initiatives for engaging in the meetings, and playing up their involvement.

All this intervention so outraged the Iranians that they immediately withdrew from all further FATF negotiations, because they no longer trusted the process. 

This of course, was always the intended result from the US point of view, because they could not bear to contemplate the possibility that Iran might become a respected and compliant member of FATF, because this would immediately give the lie to US terrorist-funding allegations, a major plank of their demands for international sanctions against Iran.

Now that the opportunities exist for a greater degree of cooperation with Tehran, it is to be hoped that the Iranians can be re-invited to come back to the discussion table and to re-enter their meetings with FATF officials, to ensure that their international compliance can finally be recognised as a reality.

Wednesday, August 05, 2015

Tom Hayes is the sole architect of his own lengthy prison sentence!

No sooner had the cell doors clanged shut on  the hapless Tom Hayes at Southwark Crown Court, then a whole group of City apologists was queuing up to protest that his sentence was too long!

I suspect that much of the angst being felt by what are clearly a lot of over-paid suits with City connections, has been caused by what appears to be the inordinate length of the prison sentence meted out to this dysfunctional man.

The message being relayed by them is that such sentences contain far too Draconian a content for offences of mere dishonesty. In making this distinction, these uninformed observers demonstrate their own ignorance of the law, but also amplify the fact that to their class and milieu, they think that dishonesty is a lesser crime than say rape, or murder.

They seek to make these fine distinctions because they have for too long, been imbued with the cultural sensibility that cheating and stealing, as long as it takes place within the elevated environs of the Square Mile, and within the private rooms of the financial elites, is to be treated somehow differently from crimes committed in the back streets of Peckham or Mile End!

I was interviewed on Radio 2 yesterday afternoon together with just such a person, a barrister who felt that the sentence was far too long; who tried to draw distinctions with crimes of violence, and who started wittering on about whether Hayes would be rehabilitated by such a sentence.

I once interviewed under caution and on tape, a City solicitor whom I had arrested for his part in creating and running a complex derivatives fraud. He said to me that he had always believed that what he was doing would be treated more leniently and with greater discretion because it was carried out in the name of a commercial exercise, and that he had always expected the City Fathers to be generally more responsive and understanding to men of his class and social status.

I was delighted to disabuse him of that perception.

Tom Hayes has been the architect of his own lengthy prison sentence. His criminal actions put him firmly in the main arena for such a sentence by the egregious nature of his trading activities, the length of time during which he had been engaged in such dishonesty, the amounts of money involved and the criminal proceeds generated, and his subsequent conduct. He fits the sentencing guidelines perfectly!

A good friend of mine writes and disagrees with me that the sentence might be a deterrent. He too is a barrister, (we studied together many years ago) and he states;

“...I can find no evidence that supports the notion of deterrent sentencing. My understanding of criminology was that criminals do not fear the sentence they fear getting caught. In the case of Libor fixing it was clearly endemic but I doubt that many are quaking in their boots about 14 years or being caught. The next step surely is to get Hayes to convict others through his testimony with the inducement of a reduced sentence...”

In some respects, he is correct, so I am going to spend a little time trying to demonstrate why I believe this sentence will operate as a deterrent. First, however, we need to examine the behaviour of Tom Hayes himself, because it is from that direction, much of his present predicament has emanated.

As I enunciated yesterday, Tom Hayes thought he could game every system that prevented him from getting his own way. He succeeded with LIBOR, but he failed dismally with the legal process. His supreme arrogance in believing that he could hoodwink the SFO and the Courts into giving him his own preferred outcome, could have come straight from the pages of ‘The Bonfire of the Vanities’!

In his own admissions in court, Hayes was faced with two alternative options. He could wait to be extradited to the US where he would face an appalling choice of being sentenced to over 90 years in gaol, or trying to find a way of getting the SFO to charge him in London.

He worked out that the best way of getting charged in the UK, and thus being tried here, was for him to make a full cooperating agreement with the SFO.

By offering to co-operate, Hayes could have expected a third off any sentence if he had pleaded guilty at the earliest possible opportunity. It certainly looked as if that was what he was planning to do when, in the spring of 2013, he made a series of admissions as part of what is now called a SOCPA – Serious Organised Crime and Police Act Agreement, or what was, in effect, a plea bargain in which Hayes agreed to give evidence against alleged co-conspirators.

By entering into this agreement, Hayes was formally informing the SFO of his willingness to co-operate and give evidence against others. In turn this was an early encouragement to the SFO to charge him in the UK, thus effectively pre-empting his extradition to the US.

So far, so good, but what the SFO could not have known was that Hayes had no intention of keeping his side of the bargain. He had got what he wanted, a trial in the UK, and he must have been congratulating himself on the effectiveness of his plan and his superior intelligence in hoodwinking the prosecutors.

For the purposes of clarity, I am quoting (in italics) from selected extracts of the “...SOCPA Agreements: Practical Note For Defence Advocates...”

The process for accepting an offer of co-operation in complex and convoluted.
The decision is not just made after any old casual conversation with an accused but only after a complex series of procedures have been entered into.
The decision whether it is appropriate to offer a formal written agreement in any particular case is entirely that of the specified prosecutor.
The criteria to be considered in determining whether it is appropriate to grant immunity to a witness are as follows:
  1. Whether, in the interests of justice, it is of more value to have an offender as a witness for the Crown rather than as a possible defendant;
  2. Whether, in the interests of public safety and security, the obtaining of information about the extent and nature of criminal activities is of greater importance than the possible conviction of an offender;
  3. Whether it is very unlikely that any information could be obtained without an offer of immunity and whether it is also very unlikely that any prosecution could be launched against the offender to whom the immunity is offered.
Formal notices and agreements will usually only be signed after the offender has been interviewed under caution and provided at least a version of the information available. 

The investigator will seek to obtain sufficient information to assist a specified prosecutor to decide if an agreement is suitable; this will either be through the offender's legal representative or through direct contact with the offender.

Having obtained a provisional view from the prosecutor, investigators will proceed to conduct a "scoping interview" interview to ascertain, among other things, the reason(s) for the offender requesting or agreeing to be interviewed and the extent to which the offender can give evidence or intelligence. 

The scoping exercise will need to identify what areas the offender can assist with, and what, if any, un-prosecuted criminal activity needs to be addressed. It will enable senior officers in consultation with the prosecutor to decide whether the offender should be admitted to the full debriefing procedure. 

The offender should ideally be legally represented through recruitment, scoping and debriefing and there should be full engagement with the prosecutor, who can provide assistance.

The investigator will gather the required information confidentially in order to reduce any perceived threat or risk to the offender.

The debrief unit will then refer the matter to a specified prosecutor who will consider if a full debrief should be undertaken in pursuance of a SOCPA contract.

In order to benefit from immunity, a restricted use undertaking or a witness agreement an offender must:
  • fully admit their own involvement in the crime or crimes under investigation;
  • provide the investigators with all information available to them regarding the matters under investigation and those involved;
  • agree to maintain continuous and complete co-operation throughout the investigation and until the conclusion of any criminal or other proceedings arising from the investigation, including giving evidence in court where appropriate.
Those offenders who are to give evidence for the prosecution and who wish to benefit from a written agreement will be required to admit their criminality fully. This process, often called "cleansing", should be part of the de-briefing process carried out by the investigating agency in the process of obtaining the evidence of the offender. 

Hayes would have gone through all these processes before appearing at Court, hence the reference to the 82 hours of formal de-briefing interviews he undertook with the SFO.

Throughout this process, it appears that Hayes was always intending to go back on his agreement with the SFO, and plead ‘Not Guilty’ and try and game the Court proceedings as well. This is what I call really ‘dumb’, because Hayes could not have ever argued that his admissions were solicited from him by a trick or cheat, and by entering into this agreement and by talking to the SFO, he was laying out his guilt for everyone to see.

The SFO must have been incandescent with rage when they discovered his real intentions at the last minute, and it is all credit to them that there was no leak of this grotesque breach of legal process.

However, the Judge would have been fully aware of the behaviour of the defendant, and no doubt this cavalier behaviour might well have coloured His Honour’s  views of Tom Hayes and his credibility.

So why do I disagree with my old barrister friend when he says that  “...My understanding of criminology was that criminals do not fear the sentence, they fear getting caught. In the case of Libor fixing it was clearly endemic but I doubt that many are quaking in their boots about 14 years or being caught...”

When it comes to ordinary criminals (and I am referring here to those who might frequent the back streets of Peckham or Mile End), my friend is right when he says the greatest deterrent is the likelihood of getting caught. This amplifies the truth and wisdom of the old villain’s adage, ‘...If you can’t do the time, don’t do the crime,,,’

But in White Collar cases, and particularly in these recent City banking scandals, the accused generally share the same view as the bent solicitor I referred to earlier in this piece. 
They never, at any time, ever thought they would be prosecuted or otherwise dealt with in any manner, which remotely approached the working-class deterrent of prosecution.

They considered themselves above the law, and they had been allowed for years to get away with that very view, because the State and the regulators had simply ignored their wrongdoing. They had seen others getting away with the most appalling criminal conduct and they had formed the view that such behaviour was somehow fair game in the City. 

Hayes himself at some point in evidence made reference to the fact that LIBOR was an unregulated market sector (as if that made any difference)!

No, these people do not share the same qualities as ordinary criminals, and where they have never had to fear the consequences of getting caught, there has been nothing to deter them from engaging in wholesale criminal conduct.

Now they know different.

These men and women are the arch risk/reward calculators, they examine every trade to establish its risk/reward ratio, and they now know that if they continue to behave in the hitherto thoroughly criminal ways they have been used to adopting, they have the Hayes sentences to contend with as a benchmark. Of course, if they think they will still not get caught, then they may continue, but with this conviction, the SFO has bought itself a new lease of life. Government will now be keen to cash in on this conviction and I expect that the SFO will get bigger budgets in future to go after City crime. They have proven that it can be done, and we will now see a lot of guilty pleas being entered by outstanding defendants, because they are all in the same leaky boat as Tom Hayes.

The most important lesson they will learn is not to try and game the Criminal Justice system because agreements once given to the Court are not some dodgy dealer’s word of mouth deal, they are writ in tablets of stone, and you break them at your peril.

Tom Hayes left it too late to learn that lesson. He had got away with the most egregious conduct for years. He had made millions, and he must have thought himself immune from any form of intervention. How he must have sneered at the young lawyers and investigators from the SFO as he sat in their interview rooms, pouring out his crimes and misdeeds, knowing in his own mind that he was going to break his word as soon as it suited him. 

If ever a man was hoist with his own Petard, it was Tom Hayes. He will spend every minute of his time inside as a marked man whose word is not to be trusted!

Tuesday, August 04, 2015

Tom Hayes gets thoroughly deserved deterrent prison sentence.

‘...You will go to prison for 14 years...’

In those words, Mr Justice Cooke, sealed the fate of Tom Hayes, the first organised criminal to be convicted of manipulating the LIBOR rate.

Others are waiting in the wings!

But the Judge did more than that. He also set the seal on the final determination of the character of the reputation of the City of London banking sector, identifying, once and for all, its inherently organised criminal nature.

The Judge has sent a very loud message to the UK banking industry, warning that its ‘dishonest and wrong’ conduct would not be tolerated any more. The Judge identified the core nature of the illegal and dishonest conduct of the financial sector when he said that senior bankers had ‘...condoned, embraced and even encouraged Hayes’ activities...’ and a message needs to be sent to the world of banking accordingly.

The Judge hammered home the need for the reputation of products such as LIBOR to be maintained, and that probity and honesty was essential in the running of the Square Mile.

So, let us hear no more of the so-called ‘fine reputation and clean record’ of the City banking sector. Let the message go out to the BBA, and all the other cosy clubs and trade associations in the Square Mile which seek to support the banking industry, that their dreadful criminal reputation has been finally nailed to the door of history for everyone to see.

One of their own, a man in a position of immense trust and financial power has been held out to dry in the eyes of a disbelieving world as a crook, a cheat, a sponger, a man who pimped the reputation of his desk to steal inordinate profits for his house, and to make money for his back trouser pocket in the form of massive bonuses.

He was the man whose existence is always denied by the senior bankers in their plush offices on the 5th floor when the word starts to trickle out that something is rotten in the financial sector. 

So, no more ‘rotten apple’ theory please, no more ‘rogue trader’ nonsense, Tom Hayes is the gatekeeper to a procession of shabby white socked yobs, spivs and wideboys who will soon be appearing in a Palais de Justice near you, to be tried for their alleged crimes.
But this is not the end of the story.

Oh no, this is just the start, because behind what you may have read reported, there lies another, altogether too fanciful tale of deviousness, and shocking cynicism, which might have succeeded but for some superb investigation and a lot of moral courage on the part of the Serious Fraud Office.

Running in parallel with the SFO criminal investigation, was a US investigation, and Tom Hayes was firmly in their sights. They wanted Hayes in the United States being sweated in the hot seat, and had the US authorities been successful in obtaining his extradition, Hayes would have been facing a lengthy prison sentence in a state penitentiary, coupled with the need to have provided full cooperation with the US authorities to bring prosecutions against other defendants.

So Tom Hayes, the man who had spent years, gaming the LIBOR system, decided to game the Criminal Justice process. In so doing, the man who had so manifestly flouted any vestige of ethical conduct in his commercial dealings, set out to flout the ethical process of the English prosecution system.

In the course of preparing for a criminal trial, it is perfectly proper for a putative defendant’s lawyers to approach the prosecutor and seek to ascertain their view to a selected series of pleadings to specific charges. However, once an agreement has been reached, it is ethically improper for a defendant then to seek to avoid the consequences of his agreements.

According to Hayes, the FBI’s interest – and specifically the possibility of extradition to the US and a theoretical 90-year prison sentence – shaped what happened next. 

Terrified of extradition to the United States, he hired lawyers to approach British investigators to offer his cooperation with their investigation.

"I had one focus and one focus only which was not to be flown to El Paso in Texas, a maximum security prison, without my wife, without my son," he said at trial. "I didn't think about innocence, guilt or anything. My only consideration at the time was getting charged (in Britain) and avoiding extradition."

So, we are now expected to believe that Hayes made up all these hours of interviews and admissions simply in order to get charged with offences in the UK, believing, wrongly, that this would pre-empt his extradition to the USA.

His lawyers wrote to the SFO in January 2013 saying Hayes had decided to cooperate, and during a subsequent 82 hours of interviews he appeared to acknowledge his crimes and implicated 25 other conspirators.. When asked if he admitted acting dishonestly in the manipulation of Libor, he replied: “Yes, I admit that I was dishonest and was dishonest within an environment that was prevalent among all the banks, yeah.” 

Hayes added: “There is no way that I’m the only Libor manipulator in the world. It’s just not possible. I might be the most open about it and I’ve left reams of evidence.”

The SFO’s case was that Hayes had become the “ringmaster” of Libor rigging to increase his own trading profits and that he rewarded brokers influencing the rate on his behalf with so-called “wash trades” – trades that were financially neutral for Hayes on which he paid brokerage fees. “I don’t care, right, just get me any fucking trade which pays you basically today, mate,” he messaged one alleged co-conspirator. “If you keep [Libor] unchanged today, yeah, I will fucking do one humungous deal with you.”

The SFO had every reason to believe that Hayes was going to cooperate and give evidence against others, as he had agreed to during his interviews. This was why he appeared at Court on his own, without other defendants, because in order to give evidence against any others, he would have had to have pleaded guilty and been sentenced before any new trial. 

But how were the SFO to know that the man who had so routinely avoided complying with any ethical rules of the market he traded, was going to be just as cavalier with the agreements the SFO had thought he was making with them.

If SFO officers believed their suspect was about to plead guilty, they were to receive a very rude awakening. At his trial, having changed his lawyers (for reasons we may only guess at but I suspect that his original lawyers felt they could not go back on their agreements with the SFO), Hayes pleaded not guilty at Southwark crown court to eight counts of conspiracy to defraud.

This is always the problem with people who have lost all sight of any moral precept or ethical standard, you cannot trust them in anything, because they will say anything they think will help their cause no matter how daft it turns out to be.

Hayes attributes his change of heart to a sense of anger and betrayal at the behaviour of his employers in hanging him out to dry and blaming all the wrongdoing on him. I do not believe this.

This so-called very clever man, was not sufficiently clever by half, because by pleading not-guilty after all the hours of making self-implicating statements and admissions to the SFO in interviews, the only route left for him was to seek to claim that his conduct was not dishonest.

This of course, was the only legal avenue left open to him, and I am very surprised that his new lawyers (who were granted legal aid for some bizarre reason to defend this multi-millionaire) connived in the change of plea. They must have advised him of the huge risks he was running and although they were within their rights to accept the change of plea if their client’s instructions were that he genuinely believed he was not acting dishonestly, they must have first asked themselves why he made the self-incriminating statements in the first place, and if they formed the view that he was just gaming the system, then they would have warned him of the consequences he faced in sentencing.

I suspect (and let me say I have no evidence to support this, except for 40 years of police and criminal justice experience), that in the interim period between giving his statements to the SFO and his trial, that Hayes and his evidence on tape to the SFO, and his offer to give evidence against his co-defendants would have become known right across his former operating sector.

Many City traders are unethical and criminogenic by nature, and there is a strong degree of likelihood that Tom Hayes would have been aware of the risks he would run in giving evidence against others. There are plenty of dangerous and vicious men in London who mix in the same milieu as the drug-snorting, champagne-swilling high-octane world of the millionaire bank broker, men who would think nothing of taking a contract to eradicate Hayes if the right money was on the table.

I suspect that fear for his future well-being drove Hayes’s decision to change his plea and in many respects, this would have suited all the other defendants because they would have been given a chance to see the strength of the SFO’s case, as well as reflect on any sentence Tom Hayes might receive.

Well, he has got 14 years, and rarely was a sentence so richly deserved.

He has been given what is called a deterrent sentence, one which is intended to send a very important message to the market sector in which Tom Hayes once worked.

The Judge has let it be known that the Courts will not tolerate criminal behaviour by the City elites and that their adherence to honesty and good conduct is as important as to anyone else.

This trial has sent a clear message to the City spiv demi-monde that they are subject to the same rules and regulations as any other person and dishonesty will be punished severely. 

The purpose of a deterrent sentence is aimed at deterring the offender from ever committing a similar offence, but more importantly in some sectors, deterring others from committing similar offences.

We have long needed such a finding such as this because the City has been allowed to become a moral sink, an ethical desert, and widespread criminal offences have been committed by brokers and traders, enriching their employing institutions, and by so doing, being paid huge bonuses.

Some may say that 14 years is too long and not a deterrent.

Well, I say that it is a fine sentence, the sort I have been advocating for years, and will send a very strong message to the market. The judge has laid down an important benchmark, ‘ commit these kind of crimes, and this is the sort of sentence you can expect...’ 

Financial traders and brokers are the arch exponents of calculating the risk/reward ratio for every trade they do. After today, the risks will far outweigh the rewards.

I expect that the telephones in the SFO’s offices are ringing off the hook today with solicitors phoning for appointments to come in and discuss plea bargains for their clients still awaiting trial on LIBOR manipulation charges. There is no way that any other accused person is going to try and run the gauntlet with this kind of sentence waiting to be collected for guessing wrong.

Oh, and guess what, Tom Hayes can and probably will still be extradited to the US to face investigation for his breach of US laws, so he has got that to look forward to as well.