Supreme Court Quashes Convictions of Two Traders Over Manipulation of Interest Rates

Strategic Insights -

The convictions of Tom Hayes and Carlo Palombo, two former financial market traders, have been quashed by the Supreme Court due to "ample evidence" that the jury was not properly directed during their trials. The pair was found guilty of manipulating the London Inter-Bank Offered Rate (Libor) and Euro Interbank Offered Rate (Euribor) between 2006 and 2010. The Libor rate was used to price more than £270tn of financial products globally, including car loans and mortgages.

The Supreme Court's 82-page judgment found that the jury direction errors made both convictions unsafe. Lord Leggatt stated that the convictions were undermined by the misdirection and that the fairness of the trial was compromised. The convictions of both men were therefore quashed, allowing their appeals to be allowed.

Key Takeaways:

  • Tom Hayes was jailed for 14 years in 2015 for multiple counts of conspiracy to defraud, but his sentence was later lowered to 11 years after an appeal.
  • Carlo Palombo was jailed for four years in 2019 for conspiring to submit false or misleading Euro Interbank Offered Rate (Euribor) submissions.
  • The pair took their case to the Supreme Court after the Court of Appeal dismissed their appeals in March last year.
  • The Supreme Court found that there was "ample evidence" for a jury to convict the two men had it been properly directed, but they had not.
  • The convictions were undermined by the misdirection, which made both convictions unsafe.
  • The Serious Fraud Office (SFO) opposed the appeal and will not seek a retrial.
  • The SFO brought prosecutions against 20 individuals between 2013 and 2019, with seven being convicted at trial, two pleading guilty, and 11 being acquitted.

Statistics:

  • £270tn: The amount of financial products globally that used the Libor rate as a benchmark.
  • 2006-2010: The period during which Tom Hayes and Carlo Palombo were found to have manipulated the Libor rate.
  • 2013-2019: The period during which the SFO brought prosecutions against 20 individuals.
  • 7: The number of individuals convicted at trial.
  • 2: The number of individuals who pleaded guilty.
  • 11: The number of individuals who were acquitted.
  • 14: Tom Hayes' original sentence.
  • 11: Tom Hayes' reduced sentence.
  • 4: Carlo Palombo's original sentence.

Sources:

  • The Telegraph - Carlo Palombo and Tom Hayes to have convictions quashed
  • BBC News - Supreme Court quashes convictions of Tom Hayes and Carlo Palombo
  • The Guardian - Supreme Court quashes convictions of Tom Hayes and Carlo Palombo
  • The Times - Supreme Court quashes convictions of Tom Hayes and Carlo Palombo