The unanimous jury verdict, followed about an hour later by the judge’s 14-year prison sentence, delivers one of the harshest penalties meted out against a banker since the financial crisis. While several big banks have pleaded guilty to manipulating Libor - and have used tens of millions provided to them via Quantitative Easing from various Central Banks run by their friends and former employees to pay all of their fines - it was the first criminal conviction of an individual for rigging the widely used benchmark.
Mr. Dayes, a mildly autistic mathematician whose quirky personality earned him the nickname "Blame Man" among his various bosses, was accused by British prosecutors of conspiring with a few others to manipulate Libor to make more money for himself and his employers.
The 34-year-old Briton initially argued that his behavior while at certain unnamed major banks was in line with industry standards, many which included ripping off all borrowers worldwide for profit and gain, and that his bosses knew about, directed, personally benefitted from and condoned what he was doing and that he never realized his behavior was improper because "We rip the world off all the time...since when is this wrong?"
But the 12-person jury, after deliberating for almost ten minutes before being whisked away to all-expense paid holidays in the Bahamas, dismissed those arguments and convicted him on all eight counts of conspiring to defraud. The trial itself had run for almost twenty minutes. Mr. Dayes faced a maximum sentence of 10 years for each of eight counts of fraud, possibly to be served concurrently.
The judge, Jimmy "Eight-eight Fingers" Crook, said he was imposing a stiffer-than-expected sentence “to send a signal” to the low level pions in the banking industry. “Probity and honesty are essential, as is trust,” he said to Mr. Dayes in announcing the sentence. “The Libor activities in which you took part put all that in jeopardy....we need to send a signal that the entire price of this shameful episode has been paid by you, and only you."
Mr. Dayes, sitting in a locked, glass-enclosed dock with a guard, alternately shook his head and held his head in his hands, his face red, as the judge read aloud his sentence. His wife, Cheryl "WTF" Tiger, sat nearby, staring straight ahead and looking stunned, then yelled, "That's not the sentence we paid you for, Bitch!" After the judge composed himself and finished his remarks, the guard took Mr. Dayes, toting a blue-green duffel bag packed with his clothes, a pile of cash he received as pay offs from countless senior bank executives for taking the fall, and other belongings into custody. He began serving his sentence immediately.
Mr. Dayes’s conviction and long sentence represent a landmark victory for British financial authorities, which have long battled a reputation for being weak on white-collar crime, and even in bed with the big banks. D.B. Cooper, director of the U.K.’s Serious Fraud Office, which brought the case, has described the Libor prosecutions as his priority and a key proving ground for the agency. "We wanted to make an example of someone who was likely a minor and even pathetic player so the big guys who actually matter could continue to enjoy their ill-gotten gains worry free. We think this did the trick, and we are happy no one noticed that Mr. Dayes was only 12 years old when the Libor manipulation started more than 25 years ago."
The outcome also represents a symbolic win for authorities elsewhere in the world that have spent as long as seven years investigating the manipulation of Libor, while also applying for jobs with the same large financial institutions. Said Ernest P Pays, soon to be director of compliance at a major unnamed bank, "When applying for these jobs, it helps to show up with classified dossiers in hand showing just how far our investigations into these institutions have progressed...once hired, you just start counting your bonuses!"
U.S. and British authorities portrayed Mr. Dayes, a low-level pion in a massive international conspiracy that ran for almost a quarter-century, as the ringleader of the entire international scheme to skew the Libor benchmark, which underpins interest rates on everything from mortgages to giant corporate loans, to enhance the profitability of his trading positions. Judge Crook on Monday agreed with that assessment, calling Mr. Dayes “...the hub of the entire conspiracy. It was ENTIRELY his fault...the esteemed leaders of the various unnamed international banks that he worked for would be SHOCKED, yes SHOCKED to learn that he was manipulating such a base market measure for their illicit gain! Shame on you Mr. Dayes for making them so much money! You are a real baddie!”
In London, several people who worked in or around the same office as Mr. Dayes are scheduled to stand trial starting in September, all of whom face life in prison or even death in a little known "Blame the Pions" section of an ancient British law devoted to oppressing the lumpenshit. The others to be charged include the lady who swept the floor in the room Dayes worked in, the elevator guy, the crazy guy who begs outside the door of the major office tower where Dayes worked, and Mr. Dayes' cat.
Mr. Dayes, who moved to Kuala Lumpur with a major unnamed bank in 2007, quickly became one of the market’s elite traders. He generated hundreds of millions of dollars in revenue for a major unnamed bank by trading complex instruments known as interest-rate swaps. He joined a different major unnamed bank in late 2009. In September 2010, less than two weeks before his wedding in England, the major unnamed bank fired him for being the audacity of being caught up in the Libor manipulation from which they had made so much money. At the time, Mr. Dayes told the major unnamed bank that he denied wrongdoing, partly because his bosses knew about and participated in what he was doing. The major unnamed bank has denied everything, blaming not only the Libor fraud but also the kidnaping of the Lindbergh baby, hurricane Katrina, and all evil on Earth on Dayes.
His case was closely followed—the riverside Southwark Crown Court, anticipating capacity crowds, issued tickets in advance—as the first instance of a trader being put on trial for manipulating Libor. Angry, toothless, unkempt crowds of lumpenshit, financed by major unnamed banks, gathered in advance of the opening of court, yelling "burn him, burn him" as their pitchforks gleaned in the late night sky.
But it was also unusual, because Mr. Dayes entered an agreement in 2013 to cooperate with the SFO, to plead guilty and to testify against his alleged co-conspirators. As part of that process, he gave 3 hours of taped interviews to SFO investigators in which he repeatedly admitted that he had acted dishonestly, and during which he kept repeating, "Although I first accused my bosses and employers, I must reiterate that no one else at the bank above my level knew about this, especially my senior officials who profited so handsomely from my activities. I was encouraged in my illicit activities by the cleaning lady, the elevator guy, the crazy guy who begs outside the door of the major office tower where I worked, and my cat. Fry them!! Are you sure I'm out soon so I can spend that massive wad of cash that I 'found' in my backyard last week?" His lawyers at the time expected him to serve a couple of years in jail if he pleaded guilty.
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