The trader who was made the fall guy for the wrongdoings of an entire era – Telegraph.co.uk

Tom Hayes is the sort of genius who was idiotic enough to be the ringleader of a huge fraud conspiracy with almost no other convicted members. Mr Hayes was the UBS trader convicted and sent to jail for 11 years for manipulating Libor, a widely used interest rate, and this week he was released after serving half his sentence. The three other people found guilty (out of 13 charged) were freed years ago.

Most people wont feel sorry for Mr Hayes but I do. Yes, he deserved some jail time, but a sentence longer than many given out for violent crimes was ridiculous. His was a victimless crime that was widely known in his industry, albeit massively expanded by his own inventiveness.

Essentially, he set up a trading portfolio to benefit from tiny swings in Libor, an estimated cost of borrowing, and then co-ordinated a gang to manipulate the rate by miniscule amounts within a band that was officially considered credible. No onecan definitively claim to have been cheated by it.

Anyway, this rather otherworldly finance whizz, who has mild Aspergers, inadvertently made it easy for prosecutors by at first co-operating and delivering incriminating monologues in police interviews, before suddenly switching strategy and deciding to fight his case. It was obviously a lost cause by that point.

Whats really interesting about Mr Hayes is the way in which he was made the fall guy for the whole 2008 era by a bunch of desperate prosecutors and banks. His crimes had nothing to do with excessive borrowing, bank bailouts or the stability of the financial system. Yet he became the poster boy for all of it because he was the only really rich trader who made it easy for prosecutors to lay a hand on him.

The best book on the scandal, The Spider Network by David Enrich, even lays out how Mr Hayess employer UBS was allowed to cherry-pick the evidence handed over to prosecutors from a vast cache of internal files, the rest of which it argued was protected by Swiss banking secrecy law.

Mr Hayes, naturally, was simply a bad apple, whose activities his bosss bosss boss knew nothing about. Never mind, though. Prosecutors had their scalp, so what did they care? The public, they judged, would be too stupid to notice thedifference.

Its hard to regret the fall of Aung San Suu Kyi, the erstwhile leader of Myanmar deposed by the army this week, whose political career highlights include denying her countrys genocide against the Rohingya ethnic group. Its also hard to welcome the restoration of rule by military junta in place of a quasi-democratic system, however flawed it was, especially given that it heralds a geopolitical shift in favour of the Chinese Communist Party.

The days when Britain wielded much influence over that part of the world are anyway long gone except perhaps in the legacy of leisure facilities. Visiting Myanmar about a decade ago, shortly before its opening up (which it hadnt announced at the time), I found myself observing the fattened officers of the junta up close and personal in the botanical gardens of a hill town called Pyin Oo Lwin. The town had a blissfully cool climate and was used under British rule as a summer retreat, after which the junta took it over, opened up a military school and used the town in much the same way.

On a Sunday afternoon in the gardens, which had the same layout and style of a British park, it was a strange scene. Contented-looking officers floated around on golf buggies, while young cadets prowled the garden paths with awkward, skimpily clad girls in tow, ostensibly all enjoying the wails of an emo punk group installed in the very British-looking bandstand set over a lake full of fat, orange carp. Outside the gate, locals had lined up a queue of dilapidated, Cinderella-style carriages affixed to dull-eyed, emaciated ponies, hawking rides to the army lads and their belles.

More broadly, the gardens tourist attractions had clearly been vastly expanded in anticipation of crowds that were mysteriously absent (most likely, I now know, ready for big tour groups ahead of the planned opening-up). There was a butterfly museum boasting thousands upon thousands of splendid creatures pinned, unlabelled, to the walls; an orchid house bursting with exotic species; a newly built fairy-tale tower; picnic tables; woodland walks; bamboo groves; water buffalo enclosures; and on and on. But apart from the strutting officers, all of it was empty.

Perhaps, in retrospect, they liked it that way. Why let your country develop, when you can cream off and keep the best of its vast natural wealth for yourself?

Continued here:

The trader who was made the fall guy for the wrongdoings of an entire era - Telegraph.co.uk

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