Five criminal convictions against bankers accused of interest rate rigging may be “unsafe”, the Serious Fraud Office (SFO) has conceded in the wake of a bombshell Supreme Court defeat.
A string of prosecutions were brought through the UK courts around a decade ago over allegations of criminal malpractice within some of the City’s top financial institutions.
But the safety of the convictions that followed are now under intense scrutiny in the wake of a landmark ruling that the first trader to face court, Tom Hayes, did not have a fair trial.
Mr Hayes, a former UBS and Citigroup employee, was convicted of rigging the LIBOR (London Inter-Bank Offered Rate) in 2015 and served five-and-a-half years in prison of an 11-year jail term.
But the Supreme Court ruled last month that Hayes’ jury had been misdirected by the judge, and the trial of Barclays trader Carlo Palombo which followed a similar path had also been unfair. The convictions against those two men were then quashed.
In a statement on Friday, the SFO said it has now assessed that five other criminal convictions “may be considered unsafe”, having considered the impact of the Supreme Court decision.
The cases involve Jonathan Mathew, Jay Merchant, and Alex Pabon, who were convicted of rigging the LIBOR while at Barclays between 2005 and 2007.
Also in the five is Colin Bermingham, who was convicted alongside Palombo for rate rigging and sentenced to five years in prison,
And the fifth case involves Philippe Moryoussef, a French Barclays trader who absented himself from his trial in London, saying he did not believe he would be treated fairly. He was sentenced in his absence to eight years in prison.
“We have a duty, as a prosecutor, to inform past defendants about any development that could affect their conviction”, the SFO said in its statement.
“At this point, we have made an assessment on six individuals.
“We consider that, in five instances, the circumstances that led to Tom Hayes and Carlo Palombo’s appeals being upheld by the Supreme Court could apply to them too.
“We consider that the jury directions, given at Hayes’ and subsequently Palombo’s trial and which were the basis of the court’s judgment, may apply to Jonathan Mathew, Jay Merchant, Alex Pabon, Philippe Moryoussef and Colin Bermingham’s trials. Therefore, their convictions may be considered unsafe.”
The SFO said the sixth case involves Peter Johnson, who pleaded guilty to rigging rates at Barclays, and was jailed for four years.
It said: “We have considered the judgment in respect of his guilty plea, and we consider that the conviction is safe.
“It is for each defendant to consider whether they wish to progress their case to the Criminal Cases Review Commission or the Court of Appeal.”
Ben Rose, from law firm Hickman & Rose, which secured the overturning of Mr Palombo’s conviction, reacted to the news by saying: "The SFO’s admission that the convictions of our clients, Jay Merchant, Jonathan Mathew and Philippe Moryoussef are unsafe is long-awaited good news.
"These three men were the victims of the same unfair prosecutions as Carlo Palombo and Tom Hayes, whose convictions were overturned by the Supreme Court last month.
"We have already lodged applications with the CCRC to have their cases referred back to the Court of Appeal. We will now seek to urgently expedite this process.
"We understand the SFO is still considering its position in relation to Christian Bittar. We have set out in detail to the SFO why his conviction is also unsafe – and hope it will agree with our analysis as quickly as possible."
A lawyer for Mr Johnson said he is “disappointed in the position the SFO has adopted and is considering his options”.
