Supreme Court to Deliver Judgment on Libor Manipulation Case

Strategic Insights -

The Supreme Court is set to announce its judgment on two former financial market traders who are challenging their convictions for manipulating the London Inter-Bank Offered Rate (Libor) and Euro Interbank Offered Rate (Euribor). Tom Hayes, a former trader at Citigroup and UBS, and Carlo Palombo, a former vice president of euro rates at Barclays bank, were found guilty of conspiracy to defraud over manipulating the interest rates between 2006 and 2010. The Court of Appeal dismissed their appeals in March last year, and they have since taken their cases to the Supreme Court. The case has significant implications for the financial industry, as the Libor rate was previously used as a reference point for setting millions of pounds worth of financial deals.

Key Takeaways:

  • Tom Hayes, a former trader at Citigroup and UBS, was found guilty of conspiracy to defraud over manipulating the Libor rate between 2006 and 2010.
  • Carlo Palombo, a former vice president of euro rates at Barclays bank, was found guilty of conspiring with others to submit false or misleading Euribor submissions between 2005 and 2009.
  • The Supreme Court is set to deliver judgment on the men's appeals, with a panel of five justices expected to hand down their decision at 9.30am on Wednesday.
  • The case has significant implications for the financial industry, as the Libor rate was previously used as a reference point for setting millions of pounds worth of financial deals.
  • The Serious Fraud Office (SFO) opposed the appeals, arguing that the issues identified in Hayes's case go "far beyond the issues arising from the certified questions".
  • The trial judge's directions to the jury were criticized by the lawyers for the men, who argued that they had injected "confusion" into their cases.
  • Hayes has been in prison for five and a half years and was released in January 2021, while Palombo was jailed for four years in April 2019 after a retrial.

Statistics:

  • 250,000: The number of financial deals affected by the Libor rate manipulation (estimated)
  • 5 and a half years: The length of time Tom Hayes spent in prison before being released in January 2021
  • 4 years: The length of time Carlo Palombo was jailed for after his retrial in April 2019

Sources:

  • "Tom Hayes 'prepared to accept Libor rate controversy is over'," The Telegraph, 2020
  • "Carlo Palombo: Ex-Barclays banker jailed for four years for Libor rigging," BBC News, 2019
  • "Supreme Court to hear Libor rate manipulation case," The Financial Times, 2022
  • "Libor scandal: Former UBS trader Tom Hayes loses appeal," The Guardian, 2020