City traders jailed for interest rate rigging have convictions overturned after 10-year fight
Two traders jailed for rigging benchmark interest rates have had their convictions overturned by the Supreme Court.
Tom Hayes, 45, was handed a 14-year jail sentence – cut to 11 years on appeal – in 2015, which was one of the toughest ever to be imposed for white-collar crime in UK history.
The former Citigroup and UBS trader, along with Carlo Palombo, 46, who was jailed for four years in 2019 over rigging the Euribor interest rates, took their cases to the country’s highest court after the Court of Appeal dismissed their appeals last year.
The Supreme Court unanimously allowed Mr Hayes’ appeal, overturning his 2015 conviction of eight counts of conspiracy to defraud by manipulating Libor, a now-defunct benchmark interest rate.
Tom Hayes and Carlo Palombo celebrate after their convictions were overturned. Pic: Reuters
Ex-vice president of euro rates at Barclays bank Mr Palombo’s conviction for conspiring with others to submit false or misleading Euribor submissions between 2005 and 2009 was also quashed.
Mr Hayes, who served five and a half years in prison before being released on licence in 2021, described the “incredible feeling” after the ruling.
“My faith in the criminal justice system at times was likely destroyed and it has been restored by the justices from the Supreme Court today and I think it’s only right that more criminal appeals should be heard at this level,” he said.
Tom Hayes and Carlo Palombo outside the Supreme Court. Pic: Reuters
Both he and Mr Palombo have been described as “scapegoats” for the 2008 financial crisis, but Mr Hayes said: “We literally had nothing to do with it.”
A spokesperson for the Serious Fraud Office (SFO), which opposed the appeals, said it would not be seeking a retrial.
In 2012, the SFO began criminal investigations into traders it suspected of manipulating the Libor and Euribor benchmark interest rates.
Former trader Tom Hayes. Pic: PA
Mr Hayes was the first person to be prosecuted by the SFO, which brought prosecutions against 20 people between 2013 and 2019, seven of whom were convicted at trial, two pleaded guilty and 11 were acquitted.
He had also been facing criminal charges in the US but these were dismissed after two other men involved in a similar case had their convictions reversed in 2022.
Mr Hayes, a gifted mathematician who is autistic, was described at his Southwark Crown Court trial as the “ringmaster” at the centre of an enormous fraud to manipulate benchmark interest rates and boost his own six-figure earnings.
He has always maintained that the Libor rates he requested fell within a permissible range and that his conduct was common at the time and condoned by bosses.
Mr Hayes and Mr Palombo argued their convictions depended on a definition of Libor and Euribor which assumes there is an absolute legal bar on a bank’s commercial interests being taken into account when setting rates.
The panel of five Supreme Court justices found there was “ample evidence” for a jury to convict the two men if it had been properly directed.
But in an 82-page judgment, Lord Leggatt said jury direction errors made both convictions unsafe, adding: “That misdirection undermined the fairness of the trial.”
Lawyers representing Mr Hayes and Mr Palombo said the ruling could open the door for the seven others found guilty to have their convictions overturned and that there were grounds for a public inquiry.
Retail sales grew in June as warm weather boosted spending and day trips, official figures show.
Spending on goods such as food, clothes and household items rose 0.9%, the Office for National Statistics (ONS) said.
It’s a bounce back from the 2.8% dip in May, but last month’s figure was below economists’ forecast 1.2% uplift as consumers dealt with higher prices from increased inflation.
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Also weighing on spending was reduced consumer confidence amid talk of higher taxes, according to a closely watched indicator from market research firm GfK.
Retail sales figures are significant as they measure household consumption, the largest expenditure in the UK economy.
Growing retail sales can mean economic growth, which the government has repeatedly said is its top priority.
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What does ‘inflation is rising’ mean?
Where have people been shopping?
June’s retail sales rise came as people bought more in supermarkets, and retailers said drinks sales were up.
While hot and sunny weather boosted some brick-and-mortar shops, the heat led some to head online.
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Non-store retailers, which include mainly online shops, but also market stalls, had sold the most in more than three years.
Not since February 2022 had sales been so high as the Met Office said England had its warmest ever June, and the second warmest for the UK as a whole.
The June increases suggest that the May drop was a bump in the road. When looked at as a whole, the first six months of the year saw retail sales up 1.7%.
Filling up the car for day trips to take advantage of the sun played an important role in the retail sales growth.
When fuel is excluded, the rise was smaller, just 0.6%.
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Despite lower consumer sentiment and more expensive goods, consumers are benefitting from rising wages and are cutting back on savings.
The ONS lifestyle survey – backed up by hard data like the Bank of England’s money and credit figures – shows that households have rebuilt their rainy day savings and are cutting back on the amount of money they squirrel away each month.
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