City traders have rate-rigging convictions quashed

Two former City traders who were at the centre of one of the biggest scandals of the financial crisis have had their convictions quashed following a 10-year fight.

Tom Hayes and Carlo Palombo were jailed following trials for manipulating the interest rates used for loans between banks.

They were among 19 City traders convicted in the US and UK for manipulating so-called Libor and Euribor interest rates, which are used to set borrowing costs on mortgages and commercial loans.

The Serious Fraud Office, which brought the case, said it would not seek a retrial.

On Wednesday, the Supreme Court ruled that the trials of Mr Hayes and Mr Palombo were unfair and overturned their convictions.

Speaking outside court, Mr Hayes said it felt “surreal” to be cleared and his faith in the criminal justice system had been restored.

“It’s been a long time coming, today we are vindicated and today is a happy day,” he said.

The ruling represents a vindication for the traders who have said for 10 years that they were victims of a series of miscarriages of justice.

They argued they were wrongly prosecuted for what were normal commercial practice in order to appease public anger towards the banks over the financial crisis.

Mr Hayes and Mr Palombo were among a group of traders and brokers prosecuted for rigging interest rates in nine criminal trials in London and New York between 2015 and 2019.

Mr Hayes, a former trader at Swiss bank UBS, was the first banker jailed over the scandal in 2015.

Originally sentenced to 15 years in prison, he successfully reduced it to 11 years on appeal and served five and a half years of his sentence. He was released in January 2021.

Mr Palombo was sentenced to four years in jail in 2019. He was also released in 2021.

In 2022, US courts said there was no evidence traders had broken any laws or rules and all the American convictions were quashed – leaving the UK the only country in the world where what they were accused of was criminalised.

In the UK, the traders’ cases had been blocked from reaching the Supreme Court by the Court of Appeal five times between 2015 and 2019.

• Libor, or the London interbank lending rate, was a key interest rate used to set borrowing costs for trillions of dollars worth of financial deals
• It became the focus of allegations of wrongdoing following the financial crisis in 2008
• Dozens of City traders were accused of trying to manipulate what level Libor was set at, to help the banks they worked for
• Libor was phased out after 2021