Latest news with #Libor
Spectator
30-07-2025
- Business
- Spectator
Is Len McCluskey a Manchurian candidate for the Tory party?
At Stansted on Monday, a currency kiosk offered me €270 for £300. 'Wrong way round,' I said, having swiftly figured €300 for £270 would represent an exchange rate of 1.11, close enough to the current market level of 1.14. 'Nah, mate, airport rate, innit?' This week's first lesson is never buy euros at the airport; but the second lesson is that wherever you buy them – especially if you have, say, a Mediterranean superyacht charter in prospect – you're in for a painfully expensive summer. Back in March you could have had €1.20 for your pound. Since then sentiment towards sterling has been soured by expectations of bad economic news made worse by whatever Rachel Reeves does next, necessitating successive interest rate cuts. The EU would have to perform worse than the UK to reverse the mood – but Ursula von der Leyen's Turnberry trade deal with Donald Trump, even with 15 per cent tariffs, makes that less likely. And according to analysts at HSBC, the euro that had such a rocky start at the turn of the century has emerged in volatile markets as a 'robust safe haven' for global investors, second only to gold and on a par with the Swiss franc. 'We're looking at a range of 1.16 to 1.12 over the next year,' a veteran trader tells me. 'I'm sorry to say there's little likelihood of 1.20.' Time to book a smaller yacht. The judges' message Everyone in the money markets knew that the 14-year sentence passed on the former UBS and Citigroup trader Tom Hayes (later reduced to 11 years, of which he served five and a half) at Southwark Crown Court in 2015 for his role in the Libor rate-fixing scandal was, to say the least, disproportionate. I'd go so far as to guess that the entire City felt queasy about it, as did readers of David Enrich's investigative account of the case, The Spider Network (2017). So no surprise that the Supreme Court has belatedly quashed Hayes's convictions for conspiracy to defraud and that the handful of remaining Libor-related guilty verdicts are now likely to be overturned. Confusingly, the Supreme Court justices did not fully exonorate Hayes: they found 'ample evidence' that he might fairly have been convicted for the way he pushed for Libor submissions (the data by which official interbank rates were fixed) that favoured his trading book. But they also found that the Southwark judge, Sir Jeremy Cooke, had misdirected the jury as to what the law would deem a dishonest submission, in a way that rendered Hayes's convictions unsafe. Cooke himself described the original sentence, one of the longest ever handed down for a white-collar crime in Britain, as 'a message sent to the world of banking'. But the final message received is that the lower courts and the Serious Fraud Office – which will not seek a retrial – were incompetent to deal with a scandal for which blame should properly have been shared between a multiplicity of market participants and their bosses, all of whom would have pleaded that they were merely following market practice within loose regulatory guidelines. Meanwhile, justice in the alternative form of fines on banks and money-broking firms involved will have done little or nothing to stop them gaming market rules again when circumstances make it expedient. No clarity, scant deterrent, no consistency with US courts that abandoned prosecutions for the same behaviour, and ultimately no reassurance that wrongdoing, if such there was, has been brought to book. British justice should be as embarrassed by the Libor scandal as the financial community itself. Selling out 'When money talks, you're under its spell,' wrote the great musical satirist turned maths professor Tom Lehrer (who has died aged 97) in his 1973 song 'Selling Out'. 'But what do you have when there's nothing left to sell?' Far from his funniest line but one which perhaps illuminates his decision in 2022 to place all his compositions and recordings in the public domain. Allowing teachers and performers to use his work free of copyright was the act of an academic long retired from the cabaret stage who presumably didn't need the royalties: but for as long as the dark sentiments of 'Poisoning Pigeons in the Park' and 'I Hold Your Hand In Mine' – the severed hand of a murdered lover, that is – are enjoyed, other artists struggling to protect their creations against online piracy and plagiarism will curse the high-minded Lehrer precedent. Mission impossible Good to see 'Red Len' McCluskey, the former general secretary of the Unite union, back in the news. A lawyer's report commissioned by his successor Sharon Graham found that he had signed a contract without a competitive tender for a construction firm called Flanagan, whom he called 'good friends', to build a Birmingham hotel and conference centre for the union; first estimated at £7 million, the project eventually cost £125 million – of which £96 million went to Flanagan, which also allegedly provided McCluskey with private jet flights and football tickets, though he denies any improper dealings. All of which plays to my theory about this supposed firebrand of the Corbynist left. Ever since he fuelled a hugely disruptive British Airways cabin crew strike just before the 2010 general election and declared the 2012 London Olympics a legitimate target for protests against cuts in public sector jobs, I've suspected McCluskey of being a Manchurian candidate for the Conservative party, programmed to damage Labour interests every time he grabs a headline. As Unite and its ilk exercise resurgent power, up he pops from retirement to remind us of yesterday's union barons, whose pomp and folly did so much to discredit their movement. There's a film script in this somewhere, but sadly today's Tories are so diminished not even secret agent McCluskey can save them.
Yahoo
27-07-2025
- Yahoo
Unfair trade: banker who took rap for Libor walks free
'The first nine to 12 months of prison is survival. A sort of surreal out-of-body experience, almost like it's not happening to you. The moment I got my conviction overturned, it felt very similar.' In 2015, at the age of 35, the former City trader Tom Hayes was sentenced to 14 years in prison after being found guilty of manipulating Libor, which was the world's most widely used interest rate benchmark. Last week the Supreme Court overturned the ruling. Five judges unanimously found Hayes's conviction was unsafe and said that the history of his case raised serious concerns about the effectiveness of the criminal justice system and, in particular, the process of appeal. The quashing of Hayes's conviction and that of Carlo Palombo, a former Barclays trader, threatens to reopen a Pandora's box of recriminations that arose in the wake of the 2008 financial crisis, when banks and regulators were seeking to rebuild creditworthiness in the eyes of the public. It also calls into question the cases of seven other traders convicted of Libor rigging, four of whom have already said they intend to appeal following the Supreme Court's decision. Hayes says that every one of these convictions now 'needs to go'. Sitting in an office in Temple, wearing a T-shirt emblazoned with a quote from the crime drama The Gambler, it's evident that Hayes is worn out from the ordeal. Hayes got out in January 2021, but during the five and half years he spent in Belmarsh high-security prison, the ex-UBS trader underwent the end of his marriage, mental health struggles, a conversion to God and the pain of having to watch his son become a teenager through a piece of Perspex. Once released, he says it was the experience of watching Time, the hyper-realistic BBC TV series with Sean Bean depicting life inside, that made it all real again: 'That it made me sob once again as a free man is the greatest compliment I can pay to that show,' he says. Libor, or the London interbank offered rate, was a benchmark used to reflect the rates at which banks could borrow from each other. Every day, in order to calculate an average, 16 banks submitted answers to the question: 'At what rate could the bank borrow funds by asking for and accepting interbank offers in a reasonable market size just prior to 11am?' In 2012 the Serious Fraud Office (SFO) launched criminal investigations into whether traders were making higher or lower requests – colloquially known as 'low-balling' – for the benefit of the bank's commercial position. Hayes's alleged crime was to encourage his employer to make dishonest answers. His trial revolved around the question not of whether he had asked, but whether it was legal for him to have done so. He has argued that he was simply doing his job within the framework of what managers expected. In the febrile aftermath of the financial crisis, a scalp was required. In comments to parliament, Clive Efford MP said that traders' actions could be considered 'treason'. Mark Carney, governor of the Bank of England from 2013, called for harsher prison sentences for bankers found guilty of malfeasance. 'He knew that my trial was going on. It was hugely prejudicial,' says Hayes. 'I have questioned whether I did the right thing for my son ... I was on the edge of cooperating' More than £7bn was eventually paid out in fines by banks including Deutsche, UBS, Royal Bank of Scotland, Barclays and Citigroup – but it wasn't enough to settle the score. 'Institutions had a vested interest in settling early with the regulator and paying a fine. What that does is it potentially throws individuals under the bus… it cuts the knees out from under the defence,' says Ellen Gallagher, a lawyer who represented Peter Johnson, a banker who blew the whistle on low-balling at Barclays and ended up spending four years in jail. In some ways, it was widespread misunderstanding of Libor that felled Hayes and Palombo. This lack of expertise was revealed in particular by one of the witnesses called by the SFO for the prosecution of two Barclays traders. Saul Haydon Rowe, a supposed expert on Libor, admitted texting friends mid-trial to ask them basic questions. 'This case, in common with the case of Lucy Letby, had the real problem of so-called expert evidence,' says David Davis MP. He points to a finding in a 2022 case heard in the US Second Circuit Court of Appeals – which deals frequently with technical legal matters on Wall St – which found that there was no fraud if the submitted Libor rate was one that the bank could actually borrow at, regardless of motivation. The irony is that if Hayes had decided not to fight extradition to the US, he might have served less time – or never been convicted at all. 'I have many times questioned whether I did the right thing for my son, because I was on the edge of cooperating… I would have spent very little time in prison. I probably would have kept far more of my money. I'd have been in and out. My family unit might have stayed together, and I wouldn't have spent five and a half years away from my son.' The SFO, which was given special funding by the Treasury to pursue investigations, faces questions about how it carried them out. Politicians might do some soul searching too. 'The government subcontracted a great deal of the prosecutorial function to the banks and their lawyers, allowing them, in effect, to pick the victims and serve them up as scapegoats,' in Davis's opinion. Ultimately, the overturning of Hayes's case relied on a technicality. Jurors were told by the presiding judge that a set Libor rate would inherently not have been 'genuine or honest' if it was 'influenced by trading advantage'. This question, which should have been determined by a jury, was taken as a matter of law. To Hayes's annoyance, the five appeal judges said there was still 'ample evidence' that might have formed a basis for conviction. 'It frustrates me because I'd rather have had a retrial. That would have put that sentence to bed,' he claims. Photograph by Antonio Olmos/The Observer
Times
25-07-2025
- Business
- Times
Tom Hayes has industry ban dropped after rate-rigging appeal
Britain's financial regulator has ended its attempt to ban Tom Hayes from working in the financial services industry after the Supreme Court overturned a conviction of the former star trader associated with the Libor rigging scandal. The Financial Conduct Authority said on Friday that it would take no further action against Hayes, 45, the first trader ever jailed for interest rate rigging. The regulator also said that it would end a trading ban it previously imposed on Carlo Palombo, 46, a former Barclays trader who was separately sent to prison in 2019 following a trial for manipulating Euribor, another rate. Both former traders had their convictions overturned this week. • Love, Libor and loss: the Kafkaesque ordeal of Tom Hayes The UK Supreme Court unanimously allowed Hayes's appeal on Wednesday, quashing his 2015 conviction of eight counts of conspiracy to defraud by manipulating Libor, a now-defunct benchmark interest rate. Hayes, a former star trader at UBS and Citigroup, became the face of the affair when in 2015 he was sentenced to 14 years, reduced to 11 on appeal, after being convicted of rigging Libor. He spent about five and a half years in prison and had fought over the past decade to clear his name. Palombo was sentenced to four years in 2019 for manipulating Euribor and left prison in 2021. 'I always believed that it would happen,' Hayes said after the Supreme Court overturned his conviction. 'This wasn't a gamble for me.' The court quashed the conviction after deciding that the judge who presided over his trial misdirected the jury about a central element of the case. The judge had incorrectly said the jury was not allowed to consider commercial interests in the submissions, the Supreme Court said, and that 'undermined the fairness of the trial'. The traders argued that they were wrongly prosecuted for what were normal commercial practices in order to appease public anger towards the banking system over the 2008 financial crisis. The FCA had sought to ban Hayes from trading but the ban was postponed after the regulator was ordered by the Upper Tribunal to stay its move. The regulator said it was ending action against Hayes and overturning a ban on Palombo because the overturned convictions formed the basis upon which the regulator took its action.
Bloomberg
25-07-2025
- Business
- Bloomberg
Tom Hayes' Industry Ban Dropped by FCA After UK Conviction Tossed
The UK Financial Conduct Authority dropped an attempt to ban former Libor trader Tom Hayes from the banking industry days after the country's top court overturned his criminal conviction. In a statement Friday, the FCA said that the conviction had formed the basis of its civil case against Hayes. The regulator also said it was dropping a similar suit against Carlo Palombo, another trader whose conviction was overturned along with Hayes'.
Reuters
25-07-2025
- Business
- Reuters
UK regulator drops cases against Libor scandal traders after court ruling
July 25 (Reuters) - Britain's financial regulator said on Friday that it was dropping proceedings against Tom Hayes and revoking Carlo Palombo's ban from the financial service industry, after the country's top court overturned convictions of both former traders. Hayes, the first trader ever jailed for interest rate rigging, became the face of the global Libor scandal. He challenged his conviction at the Supreme Court, along with Palombo, a former Barclays trader (BARC.L), opens new tab who was found guilty in 2019 of manipulating Euribor, Libor's euro equivalent. The Financial Conduct Authority (FCA) said it would take no further action against either individual.
