More Firms Named in LIBOR Case - JP Morgan, Deutsche Bank...More - WSJ.com *video*

U.K. Prosecutors Allege Staff From J.P. Morgan, Deutsche Bank and Others Tried to Fix Rates

By DAVID ENRICH

Tom Hayes, a former UBS and Citigroup trader, has been charged with eight counts of fraud as part of the U.K. investigation into the alleged manipulation of the London interbank offered rate. David Enrich looks at the charges as the whole probe into the rate scandal spreads globally.


LONDON—Employees of some of the world's largest financial institutions conspired with a former bank trader to rig benchmark interest rates, British prosecutors alleged Thursday, a sign authorities have their sights on an array of banks and brokerages.

The U.K.'s Serious Fraud Office this week charged former UBS AG UBSN.VX -1.93% and Citigroup Inc. C -2.15% trader Tom Hayes with eight counts of "conspiring to defraud" in an alleged attempt to manipulate the London interbank offered rate, or Libor. Mr. Hayes appeared in a London court Thursday, where prosecutors for the first time detailed their allegations against him, including a list of institutions whose employees Mr. Hayes allegedly conspired with.

Mr. Hayes, who was charged with similar offenses by the U.S. last December, hasn't entered a plea to either country's charges. He wrote in a January text message to The Wall Street Journal that "this goes much much higher than me."

London News Pictures/Zuma Press Ex-UBS trader Tom Hayes leaves a 
British courthouse Thursday.

The charges read in court Thursday accuse Mr. Hayes of allegedly conspiring with employees of eight banks and interdealer brokerage firms, as well as with former colleagues at UBS and Citigroup. Each of the eight charges accused Mr. Hayes of "dishonestly seeking to manipulate [Libor]…with the intention that the economic interests of others would be prejudiced and/or to make personal gain for themselves or another."

The banks include New York-based J.P. Morgan Chase JPM -0.99% & Co.; Germany's Deutsche Bank DBK.XE +0.18% AG; British banks HSBC Holdings HSBA.LN -0.44% PLC and Royal Bank of Scotland Group RBS.LN -7.24% PLC; and Dutch lender Rabobank Groep NV. Prosecutors alleged Mr. Hayes also worked with employees of ICAP IAP.LN +3.86% PLC, Tullett Prebon TLPR.LN 0.00% PLC and R.P. Martin Holdings Ltd., which are London-based interdealer brokers that serve as middlemen between bank traders.

An ICAP spokeswoman said the firm has provided information to British prosecutors and continues to cooperate. A Rabobank spokesman said the bank continues to cooperate with investigators and is likely to eventually reach a settlement. In a statement, Tullett said it is "cooperating fully" with prosecutors' requests for information. Representatives for the rest of the named institutions declined to comment.

The list of banks and brokerages named at Thursday's court hearing underscores the breadth of institutions that remain under government scrutiny. So far, only three banks—UBS, RBS and Barclays BARC.LN -2.26% PLC—have reached settlements with U.S. and British authorities. Authorities hope to hammer out settlements with additional institutions, including Rabobank, in coming months, according to a person familiar with the investigation.

Associated Press

Deutsche Bank staff are among those under the glare of the U.K. probe into alleged interest-rate fixing. Pictured, the bank's offices in Frankfurt.

The list that prosecutors read Thursday included at least one institution that has said it wasn't involved in the Libor scandal. After UBS settled rate-rigging allegations last December, Tullett Prebon spokeswoman Charlotte Kirkham said the firm didn't help UBS manipulate rates and that no Tullett employees had been disciplined in connection with Libor. In April, Tullett said it stood by that statement.

In a statement Thursday, Tullett disclosed for the first time that it has been asked to provide information to various regulators and government agencies in connection with Libor investigations. In addition to saying it is cooperating with the requests, the firm reiterated it hasn't been informed that it or its brokers are under investigation in relation to Libor. A spokesman declined to comment further.

The interdealer brokers' alleged involvement in attempts to rig Libor has rocked the industry in recent months. Two R.P. Martin employees were arrested along with Mr. Hayes in December but not charged. The U.S. Justice Department and the Commodity Futures Trading Commission also are investigating brokers as part of their Libor probes, according to people familiar with those investigations.

Mr. Hayes, a 33-year-old British citizen, was a derivatives trader in Tokyo from 2006 through 2010, the period during which prosecutors allege he attempted to manipulate Libor. He is the only person the Serious Fraud Office has charged in their nearly yearlong Libor investigation, although an agency spokesman said this week that more arrests and charges are possible.

Mr. Hayes, wearing beige trousers and an untucked, navy dress shirt, didn't respond to the charges at court Thursday. Standing behind a glass partition in the courtroom, he was mostly silent aside from telling the judge his name, address and date of birth. At one point, the judge asked him to take his hands out of his pockets.

During his days as a trader, Mr. Hayes struck colleagues as intelligent but painfully shy, earning him the nickname "Rain Man" in reference to a character in the 1988 film. When he and his lawyer left the courthouse Thursday, they were greeted by more than a dozen photographers and cameramen, who chased the pair across a busy London street.

Write to David Enrich at david.enrich@wsj.com

More Firms Named in Libor Case - WSJ.com