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Top UK court quashes ex-bankers' Libor rate rigging convictions

Top UK court quashes ex-bankers' Libor rate rigging convictions

The UK Supreme Court has overturned the conviction of two former financial traders jailed for manipulating the Libor interest rate benchmark.
In a written judgment, the UK's highest court said that due to errors in the way the jury had been directed the convictions of Tom Hayes and Carlo Palombo were "unsafe and cannot stand".
Manipulation of the London Inter-Bank Offered Rate (Libor) and its European equivalent Euribor occurred in the run-up to and following the 2008 global financial crisis.
The international scandal it created led to prison sentences and massive fines for major banks.
The Libor was long a benchmark inter-bank rate in the financial world, impacting an enormous range of financial products in Britain and beyond, before being abolished at the end of last year following numerous scandals.
The Serious Fraud Office, which brought the original case against Mr Hayes and Mr Palombo, said it would not seek a retrial.
Mr Hayes, a former Citigroup and UBS trader, had been found guilty of multiple counts of conspiracy to defraud Libor between 2006 and 2010.
He spent five-and-a-half years in prison before his release in January 2021.
Mr Palombo, a former trader at Barclays bank, was sentenced to four years in prison for rigging Euribor.
Their cases were taken to the UK's top court after the Court of Appeal dismissed their appeals last year.
The Supreme Court noted that there was "ample evidence" against Hayes which could have led a jury to find him guilty "if properly directed".
However in both cases there were "errors and ambiguities" in the way the jury was directed, which led the top court to conclude the trials were unfair.
Libor, once a key benchmark for global finance, underpinned around $US400 trillion ($606.8 trillion) in contracts, from mortgages to student loans.
Managed by the former British Bankers' Association, it was based on daily estimates from a panel of banks on how much they expected to pay to borrow from each other. The rate was phased out in 2023.
The Libor scandal led to more than $US9 billion in fines for banks and brokers worldwide, including the convictions of 19 traders in Britain and the United States.
Mr Hayes challenged his conviction following a landmark US court decision in 2022 that overturned the Libor rigging convictions.
Caroline Greenwell, a partner at law firm Charles Russell Speechlys, said the judgment would now bring Britain in line with the United States.
"This result not only clears Mr Hayes' and Mr Palombo's names, but could also lead to convictions secured in nine other criminal trials prosecuted by the Serious Fraud Office... being reviewed," she said.
The SFO brought charges against 20 individuals between 2013 and 2019, securing convictions against nine — seven at trial and two through guilty pleas — while 11 were acquitted.
AFP/Reuters
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