Tom Hayes, the first trader ever jailed for rigging interest rates, has had his conviction overturned by the UK Supreme Court after nearly a decade of legal battles. The former Citigroup and UBS trader was found guilty in 2015 of conspiring to manipulate the London Interbank Offered Rate (Libor), receiving a 14-year prison sentence, later reduced to 11 years. The Supreme Court ruled on Wednesday that Hayes’ trial was unfair due to misdirection by the trial judge, stating that the legal instructions given to the jury were inaccurate and deprived him of a fair opportunity to present his defence.
The court said there was “ample evidence” for a jury to conclude Hayes conspired with others, largely based on his own interviews with the Serious Fraud Office (SFO). However, Supreme Court Judge George Leggatt noted that Hayes should have been allowed to argue that his actions were honest and that his defence deserved proper consideration. Declaring the conviction “unsafe,” the court also overturned the conviction of Carlo Palombo, a former Barclays trader convicted in 2019 of manipulating the euro equivalent of Libor, known as Euribor.
The SFO announced that it would not seek a retrial, stating it would not be in the public interest. Both Hayes and Palombo had challenged the legal foundation of their convictions, arguing that their actions did not violate a clear legal rule. Their victories follow a significant 2022 U.S. court decision that overturned the Libor-rigging convictions of two former Deutsche Bank traders, and come after the complete phasing out of Libor in 2023.
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