Enrich the spider network; the wild story of a math genius, a gang of backstabbing bankers, and one of the greatest scams (2017)

Dedication For Kirsten, Henry, and Jasper Contents Cover Title Page Dedication Cast of Characters Prologue Part I: The Scam Chapter 1: Watching the Coronation Chapter 2: The Hall of Mirrors Chapter 3: Classy People Chapter 4: Peak Performance Chapter 5: The Lucky Turnstile Chapter 6: The Sycophants Chapter 7: Your Name in Print Chapter 8: A Yacht in Monaco Part II: Ascendance Chapter 9: What’s a Cabal? Chapter 10: Entre Nous Chapter 11: Gods of the Sea Chapter 12: In the Flag Room Chapter 13: A Slap on the Wrist Part III: The Second Scam Chapter 14: He’s the One Chapter 15: Spiders Chapter 16: A Crook of the First Order Chapter 17: The Unit Cost of Steak Chapter 18: Charades Part IV: Victory Chapter 19: Within the Ark A Note on Sources Acknowledgments Notes Index About the Author Copyright About the Publisher Cast of Characters The Family Tom Hayes Photograph used with permission from Andrew Cowie/AFP/Getty Images Tom Hayes: Star trader at a succession of banks Nick: Hayes’s father Sandy: Hayes’s mother Robin: Hayes’s younger brother Peter and Ben O’Leary: Hayes’s stepbrothers Sarah Tighe: Lawyer who eventually marries Hayes The Traders and Bankers Royal Bank of Scotland (RBS) Brent Davies: Hayes’s mentor, later an ICAP broker Paul White: Libor submitter Neil Danziger: Party-loving trader Sarah Ainsworth: Trader; Hayes’s girlfriend; later, Crédit Agricole trader UBS Mike Pieri: Trader and manager who hires Hayes in Tokyo Mirhat Alykulov: Junior trader, nicknamed “Derka Derka” Roger Darin: Trader and Libor submitter who becomes Hayes’s nemesis Yvan Ducrot: Executive aligned with Darin Naomichi Tamura: Trader and manager Sascha Prinz: Risk-loving trader and executive Carsten Kengeter: Co-head of investment banking division Alex Wilmot-Sitwell: Co-head of investment banking division Panagiotis Koutsogiannis: Trader known as “Pete the Greek” Holger Seger: Manager Andrew Smith: Trader and Libor submitter Citigroup Chris Cecere: Trader, Hayes’s boss Brian Mccappin: Karaoke-loving CEO of Japanese investment bank Hayato Hoshino: Trader in London tasked with helping Hayes Andrew Morton: Senior investment banking executive Andrew Thursfield: Libor submitter and manager in London Laurence Porter: Libor submitter, Thursfield’s underling Burak Celtik: Libor submitter, Porter’s underling Deutsche Bank Guillaume Adolph: Trader, nicknamed “Gollum” David Nicholls: Trading manager Mark Lewis: Executive who talks with Hayes about possible job Other Banks Alexis Stenfors: Hotshot trader at Bank of America Merrill Lynch Paul Robson: Rabobank trader and Libor submitter, nicknamed “Pooks” Stuart Wiley: J.P Morgan trader Luke Madden: HSBC trader Miles Storey: Barclays Libor official Paul Ellis: Credit Suisse trader The Brokers Darrell Read, Noel Cryan, Colin Goodman, Terry Farr, Danny Wilkinson, and Jim Gilmour Photograph used with permission from BBC Motion Gallery/Getty Images ICAP Darrell Read: Broker renowned for his university degree and large nose Colin Goodman: Broker who sends out influential Libor “run-throughs” Danny Wilkinson: Red-faced broker and manager Frits Vogels: Manager in London Michael Spencer: Founder and CEO David Casterton: Spencer’s right-hand man, nicknamed “Clumpy” Anthony Hayes: Broker at Tokyo affiliate, nicknamed “Abbo” RP Martin Terry Farr: Happy-go-lucky, motorcycle-crashing broker Jim Gilmour: Down-on-his-luck broker Lee Aaron: Broker, nicknamed “Village” Cliff King: The three brokers’ manager David Caplin: CEO, nicknamed “Mustard” Tullett Prebon Noel Cryan: Amateur boxer, broker Mark Jones: Party animal, broker Nigel Delmar: Broker, Hayes’s best friend in Tokyo Danny Brand: Broker in Hong Kong Angus Wink: Senior executive The Authorities Bank of England Mervyn King: Governor Chris Salmon: Senior official British Bankers’ Association (BBA) Angela Knight: CEO John Ewan: Official in charge of Libor U.S Commodity Futures Trading Commission (CFTC) Gary Gensler: Chairman David Meister: Head of enforcement division Stephen Obie: Enforcement official Vincent McGonagle: Enforcement official Gretchen Lowe: McGonagle’s deputy U.S Justice Department Denis McInerney: Head of fraud division Robertson Park: Lawyer in fraud division William Stellmach: Lawyer in fraud division Scott Hammond: Lawyer in antitrust division U.K Financial Services Authority (FSA) Margaret Cole: Head of enforcement Patrick Meaney: Investigator U.K Serious Fraud Office (SFO) David Green: Director Matt Ball: Investigator The Lawyers Lydia Jonson: Hayes’s lawyer, from Fulcrum Chambers Ivan Pearce: Hayes’s lawyer, from Fulcrum Chambers Steven Tyrrell: Hayes’s U.S lawyer (previously at Justice Department) George Carter-Stephenson: Hayes’s barrister before his trial Neil Hawes: Hayes’s barrister during his trial Mukul Chawla: Barrister representing the SFO Jeremy Cooke: Judge presiding over Hayes’s trial Gregory Mocek: Barclays lawyer (previously at CFTC) Gary Spratling: UBS lawyer (previously at Justice Department) * Hayes would later claim that he simply thought it would be more effective if Hoshino casually approached the London colleagues in person, and that’s why he told him not to put it in writing * Years later, regulators would still be searching for a convincing explanation for what caused the plunge American authorities would criminally charge a socially awkward math whiz named Navinder Sarao as a primary culprit Trading out of his family’s modest London home, Sarao had been using algorithms to simulate bids and offers—a strategy that prosecutors would allege had helped trigger the crash * No Barclays traders had been arrested It’s unclear what Celtik was referring to * The FSA would later tell Wilkinson that his bosses had been lying—the agency had nothing to with his suspension * Williams added a caveat: “Strange things happen.” * The same was true at home One day, he was setting up an old iPhone for his son and encountered a cache of years-old materials: photos, e-mails, text messages Dozens of the texts were with Read Goodman alerted his lawyers, who passed the messages on to the FSA They would become crucial pieces of evidence against the two men * Barclays’s lawyers successfully negotiated to keep any clues about the executives’ identities out of the settlement documents * The SFO team also got ample doses of Hayes’s oddball nature At one point, explaining why he didn’t like to manage people, he said: “Mainly because people are variables that don’t behave in predictable ways, and, you know, they’re difficult to manage And I’d rather manage risk than people.” * UBS would later say that the instructions didn’t represent official company policy and must have been created by a rogue employee * Unlike in the United States, where defendants unable to afford their own lawyer are assigned a public defender, in Britain they get to pick a private lawyer who then gets reimbursed through the Legal Aid program * The SFO also filed charges against seven former Barclays employees for their alleged roles in the Libor scandal, although they were unconnected to Hayes * It fit into a pattern for the Hayes clan Family members believed that Sandy’s father, Peter Hunt— a pioneer in the nascent British computing industry in the 1960s—also had autism * Hayes’s father didn’t plan to attend Nick’s presence there risked enraging Sandy and, in turn, adding to his son’s stress * Kengeter says he wasn’t aware of wrongdoing at UBS * The Justice Department would later drop its charges against the three former ICAP brokers ... diverse financial needs and, in the process, to make a lot of money for themselves One invention was the use of a group of banks, known as a syndicate, to jointly make loans That had the advantage not... building a career as a bank trader Hayes started at the Royal Bank of Scotland that fall RBS’s office was on the bustling eastern edge of the City, just across a busy street from the Bishopsgate Police... was similar to a die-hard Red Sox fan placing a bet that the Yankees would beat his team in the playoffs—that way, even if the fan’s heart was broken, he would at least win a little money as a