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Supreme Court Quashes Convictions of Former Traders Tom Hayes and Carlo Palombo in Libor Rate-Rigging Case

Strategic Insights

— 1 min read

The Supreme Court has quashed the convictions of former financial market traders Tom Hayes and Carlo Palombo, who were found guilty of benchmark interest rate rigging. The five justices, led by Supreme Court president Robert Reed, found that the jury had been misdirected, making both convictions unsafe. The case relates to the manipulation of the London interbank offered rate (Libor) and the Euro interbank offered rate (Euribor). Tom Hayes, a former trader at Citigroup and UBS, was convicted in 2015 and sentenced to 14 years in prison, later reduced to 11 years. Carlo Palombo, the ex-vice-president of Euro rates at Barclays, was convicted in 2019 and sentenced to four years in prison.

Key Takeaways:

  • The Supreme Court quashed the convictions of Tom Hayes and Carlo Palombo due to jury direction errors that made both convictions unsafe.
  • Tom Hayes was found guilty of conspiracy to defraud in manipulating the London interbank offered rate (Libor) between 2006 and 2010.
  • Carlo Palombo was found guilty of conspiring with others to submit false or misleading Euro interbank offered rate (Euribor) submissions between 2005 and 2009.
  • The convictions were quashed due to inaccurate and unfair jury directions, which deprived the defendants of the opportunity to have their defense fairly presented to the jury.
  • The Serious Fraud Office (SFO) has stated that it will not seek a retrial, citing that the convictions are unsafe and cannot stand.
  • Tom Hayes was previously sentenced to 14 years in prison, later reduced to 11 years, while Carlo Palombo was sentenced to four years in prison.

Statistics:

  • 9 convictions of senior bankers for fraud offenses, including 3 guilty pleas and 6 convictions by juries.
  • 7-year investigation by the Serious Fraud Office (SFO) into traders suspected of manipulating Libor and Euribor.
  • 20 individuals prosecuted by the SFO between 2013 and 2019, resulting in 7 convictions, 2 guilty pleas, and 11 acquittals.

Sources:

  • "Tom Hayes and Carlo Palombo: Supreme Court quashes convictions in Libor case" by The Times (no date provided in source material)
  • "SFO welcomes outcome of Supreme Court judgment in Libor manipulation case" by Serious Fraud Office (no date provided in source material)
  • PA (Press Association) news article (no date provided in source material)

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