Supreme Court Quashes Convictions of Two Traders Over Libor Rate Manipulation

The Supreme Court has quashed the convictions of Tom Hayes and Carlo Palombo, two financial market traders who were jailed for manipulating benchmark interest rates. The court found that the jury had been misdirected by the trial judges, rendering their convictions unsafe. Hayes was found guilty of conspiring to defraud over manipulating the London inter-bank offered rate (Libor) between 2006 and 2010, while Palombo was found guilty of conspiring to submit false or misleading euro interbank offered rate (Euribor) submissions between 2005 and 2009.

Key Takeaways:

• The Supreme Court quashed the convictions of Tom Hayes and Carlo Palombo, citing jury direction errors in both trials.
• The court found that the trial judges had misdirected the jury, depriving both men of a fair trial.
• Hayes was originally sentenced to 14 years in prison, later reduced to 11 years, while Palombo received a four-year sentence.
• The court's ruling highlights the need for accurate jury directions in trials, particularly in complex financial cases.
• The Libor rate, a benchmark for setting millions of pounds worth of financial deals, was previously reliant on truthful submissions from leading banks.
• The Serious Fraud Office (SFO) investigated 20 individuals between 2013 and 2019, resulting in nine convictions for fraud offences.

Statistics:

• 9: The number of convictions secured by the SFO for fraud offences related to Libor and Euribor manipulation.
• 14 years: The original sentence handed down to Tom Hayes, later reduced to 11 years.
• 4 years: The sentence handed down to Carlo Palombo.
• 20: The number of individuals investigated by the SFO for Libor and Euribor manipulation.
• 7: The number of acquitted individuals.
• 11: The number of acquittals in total.
• 2: The number of individuals who pleaded guilty.
• 2022: The year in which two other men involved in a similar case had their convictions reversed, leading to the dismissal of charges against Tom Hayes in the US.

Sources:

• Alliance News Ltd. (2025) "Two financial market traders who were jailed for manipulating benchmark interest rates have had their convictions quashed at the Supreme Court."
• PA (PA Media) "Tom Hayes, who had his conviction over interest rate rigging quashed at the Supreme Court, celebrated outside the court alongside his legal team and Tory MP David Davis."
• Serious Fraud Office (SFO) Statement after the judgment: "Our investigation led to nine convictions of senior bankers for fraud offences, with two of these individuals pleading guilty and seven found guilty by juries."