Former trader for UBS and Citigroup Tom Hayes and ex-Barclays trader Carlo Palombo were both jailed in 2015 and 2019, respectively, for manipulating benchmark interest rates that underpinned $350 trillion (€298.5tr) of loans and securities at the time. They were among a group of traders prosecuted at the time for rigging interest rates.
Ten years after Mr Hayes went to jail, the UK Supreme Court (UKSC) cleared both of their names by ruling that they had unfair trials and overturned their convictions.
Hayes served five-and-a-half years in prison for rigging Libor, the London Inter-Bank Offered Rate, which is now a defunct benchmark interest rate. It was an average calculated from estimates submitted by the leading banks in London and Hayes was one of the traders on the panel, submitting rates. He was found to be intentionally submitting rates to his own advantage.
Mr Palombo was jailed later for rigging the Euribor, an average rate also influenced by a large panel of European banks that borrow funds from one another.
The UK Supreme Court said on Wednesday, that the juries were misdirected by judges in both cases.
“There was ample evidence on which a jury, properly directed, could have found the appellant guilty of conspiracy to defraud. But the jury was not properly directed,” the UKSC statement read.
“That made the trial unfair and leads to the conclusion that Mr Hayes’ convictions must be quashed.”
In Mr Palombo’s case, the court ruled similarly — “essential errors” and “ambiguities”, adding that the “conviction is also unsafe and must be quashed”.
