Manipulation of Euribor and Libor interest rates: conviction of two former traders overturned in the United Kingdom
They had been sentenced to prison terms for manipulating the Libor and Euribor interbank rates. The British Supreme Court overturned the convictions of former traders Tom Hayes and Carlo Palombo on Wednesday, July 23, ruling that their trials had been "unfair."
The highest British court acknowledged that "there was ample evidence" against Mr. Hayes, but pointed to "the judge's instructions" which did not allow his lawyers to defend him properly before the jury, which "rendered the trial unfair."
In Mr. Palombo's case, "the jury instructions are not as objectionable," but contained several "errors and ambiguities" that make his conviction "also unjustified and must be overturned," according to a summary of the decision sent to the press by the Supreme Court.
The Serious Fraud Office (SFO), the UK's financial crime agency that was leading the prosecution, decided on Wednesday to stop the proceedings, having "determined that it would not be in the public interest for us to seek a retrial" at this stage, according to a separate statement.
Libor to be abolished in 2024Mr. Hayes, a former trader at UBS and Citigroup, was convicted by a jury at Southwark Crown Court in August 2015 and initially sentenced to 14 years in prison. He had his sentence reduced to 11 years on appeal and was granted early release in 2021.
The SFO accused him of orchestrating a system of collusion between September 2006 and September 2010 with traders from the Swiss bank UBS and the American bank Citigroup, as well as those from other institutions, in order to influence the level of Libor to their advantage.
In his defense, the former broker explained at the time that interest rate manipulation was "commonplace" in the financial industry. His lawyers also argued that he suffered from Asperger's syndrome, an autistic disorder.
Mr. Hayes' case was being examined alongside that of a former Barclays trader, Carlo Palombo, who was sentenced in 2019 to four years in prison for manipulating Euribor, the euro equivalent of Libor.
The UK Criminal Cases Review Commission had brought the case back to the Court of Appeal after a US court ruling in 2022 overturning similar convictions against other traders. But the Court of Appeal upheld the convictions last year.
Libor (London Interbank Offered Rate) has long been a benchmark interbank rate in the world of finance, affecting a vast array of financial products. Following numerous scandals, it was finally abolished last October.
The World with AFP
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