Five more bankers convicted of rigging interest rates may be a step closer to clearing their names after the supreme court overturned a decade-old ruling against the trader Tom Hayes last month.
The Serious Fraud Office said it had assessed the cases of six individuals who were charged with manipulating the euro interbank offered rate (Euribor) or the now defunct London interbank offered rate (Libor) and determined that five convictions “may be considered unsafe” after July’s ruling.
Both Euribor and Libor rates affected the value of hundreds of trillions of pounds and euros worth of financial products around the world, including ordinary people’s pensions, mortgages and savings. The SFO’s investigations, which were launched 13 years ago, resulted in nine fraud convictions against senior bankers, including Hayes, who had been accused of rigging the rates.
But Hayes, who was the first banker jailed over Libor rigging in 2015, had his name cleared in July after the supreme court found faults in the original trial. The court said the original judge had given “inaccurate and unfair” instructions to the jury that found him guilty on charges of conspiracy to defraud. This meant the former banker was ultimately deprived of a fair trial.
The supreme court simultaneously quashed the conviction of Carlo Palombo, a former Barclays trader who was sentenced to four years in prison in 2019 for rigging Euribor.
The SFO said it had a duty, as a prosecutor, to inform past defendants about any developments that could affect their convictions. “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.”
It said the court’s concerns about directions given to the jury in the original trial may also apply to the former Barclays bankers Jonathan Mathew, Jay Merchant, Alex Pabon, Philippe Moryoussef and Colin Bermingham, who were each handed jail sentences of between four and eight years. “Therefore, their convictions may be considered unsafe,” the SFO said.
“For one individual, Peter Johnson, we have considered the judgment in respect of his guilty plea and we consider that the conviction is safe,” it added.
The SFO said it was now up to each defendant to consider whether they wanted to take their case to the Criminal Cases Review Commission or the court of appeal.
Commenting on the SFO’s statement, Hayes said: “It’s taken 10 years for the SFO to acknowledge the continued failures in the Ibor trials. As a result, many people spent years in prison.”
Hayes raised concerns about the SFO’s view of Johnson’s case and that of a former Deutsche Bank trader, Christian Bittar.
“Even now with this acknowledgment, the SFO continues to prolong the agony of Peter Johnson and Christian Bittar by refusing to accept that they too were the victims of a flawed case in law that is not acknowledged as a crime anywhere else globally,” he said.
