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Banks (Finance)

Supreme Court Overturns Convictions of Two Bank Traders in Libor Scandal

Strategic Insights

— 1 min read

In a significant judgment, the Supreme Court of the United Kingdom has overturned the convictions of two bank traders, Tom Hayes and Carlo Palombo, who were found guilty of conspiracy to defraud in relation to their involvement in the manipulation of the London Inter-bank Offered Rate (Libor) and the Euro Inter-bank Offered Rate (Euribor). The court ruled that the convictions were unsafe due to the trial judges' directions, which removed consideration of the defendants' defense from the jury by instructing them that a submission could not be genuine or honest if it was influenced by trading advantage.

Key Takeaways:

  • The Supreme Court ruled that the trial judges' directions were incorrect, as they treated a question of fact as a matter of law, removing consideration of the defendants' defense from the jury.
  • The court held that whether a submission was genuine or honest did not turn on how a court construed the Libor and Euribor definitions, but on the state of mind of the submitter.
  • The jury directions given in both cases undermined the fairness of the trial and made the convictions unsafe.
  • The convictions of Tom Hayes and Carlo Palombo were overturned, and new trials may be held to determine their guilt or innocence.
  • The judgment highlights concerns about the effectiveness of the criminal appeal system in England and Wales in confronting legal error.
  • The court certified that a point of law of general public importance was involved in its decision, regarding the construction of the Libor and Euribor definitions.

Statistics:

  • 2 bank traders, Tom Hayes and Carlo Palombo, had their convictions overturned by the Supreme Court.
  • The court ruled that the trial judges' directions were incorrect in 2 cases, Hayes's and Palombo's trials.
  • The appeals were made possible by the decision of the United States court in **United States v Connolly and Black** ((2022) 24 F 4th 821).
  • The Criminal Cases Review Commission referred the convictions of Hayes and Palombo back to the Court of Appeal on 2 occasions, in July 2023 and October 2023.

Sources:

  • [Source 1] Byline: Rex v Hayes; Rex v Palombo Before Lord Reed, Lord Hodge, Lord LloydJones, Lord Leggatt and Lady Simler [2025] UKSC 29 Judgment July 23, 2025
  • [Source 2] United States v Connolly and Black ((2022) 24 F 4th 821)
  • [Source 3] UK Court of Appeal (Criminal Division) [2024] 2 Cr App R 6

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