Top UK court quashes ex-bankers’ rate rigging convictions

The UK Supreme Court overturned the convictions of Tom Hayes and Carlo Palombo for Libor manipulation. Photo / Getty Images

The UK Supreme Court on Wednesday overturned the conviction of two former financial traders jailed for manipulating the Libor interest rate benchmark.

In a written judgment, the UK’s highest court said that due to errors in the way the jury had been directed, the convictions of Tom Hayes and Carlo Palombo were “unsafe and cannot stand”.

Manipulation of the London Inter-Bank Offered Rate (Libor) and its euro equivalent, Euribor, occurred in the lead-up to and following the 2008 global financial crisis.

The international scandal it created led to prison sentences and massive fines for major banks.

The Libor was long a benchmark inter-bank rate in the financial world, impacting an enormous range of financial products in Britain and beyond, before being abolished at the end of last year following numerous scandals.

The Serious Fraud Office, which brought the original case against Hayes and Palombo, said it would not seek a retrial.

Hayes, a former Citigroup and UBS trader, had been found guilty of multiple counts of conspiracy to defraud Libor between 2006 and 2010.

He spent five-and-a-half years in prison before his release in January 2021.

Palombo, a former trader at Barclays Bank, was sentenced to four years in prison for rigging Euribor.

Their cases were taken to the UK’s top court after the Court of Appeal dismissed their appeals last year.

The Supreme Court noted that there was “ample evidence” against Hayes, which could have led a jury to find him guilty “if properly directed”.

However, in both cases, there were “errors and ambiguities” in the way the jury was directed, which led the top court to conclude the trials were unfair.

-Agence France-Presse