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.
Image: 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.
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Image: 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.
Image: 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.
Labour’s deputy leadership contest is on the brink of becoming a two-horse race between Bridget Phillipson and Lucy Powell, as the other three candidates scramble for nominations.
The official tally from the Parliamentary Labour Party (PLP) on Wednesday night put Ms Phillipson, the education secretary, ahead with 116 nominations.
Ms Powell, the former Commons leader who was ousted in Sir Keir Starmer’s reshuffle last week, is behind with 77 – just three shy of the 80 needed to make it to the next round.
Bell Ribeiro-Addy, Paula Barker and Dame Emily Thornberry all had support from 15 or fewer MPs as of Wednesday evening, fuelling speculation they could follow in the footsteps of housing minister Alison McGovern and pull out.
Ms Barker, the MP for Liverpool Wavetree, told Sky News she was “genuinely undecided” and had a lot to consider.
Image: Education Secretary Bridget Phillipson kept her job in the recent reshuffle. Pic: PA
Ms Barker, a former trade union official, has challenged the government on Gaza and welfare cuts and is part of the newly formed soft-left “Mainstream group”.
Her allies are keen for her to stay in the race, with one telling Sky News she “outshone the others by miles” during an online hustings event for MPs, and would be a “real alternative for the membership”.
Her supporters are expected to throw their weight behind Ms Powell if she does drop out, with one saying of the Manchester Central MP: “She is closer to Andy Burnham, and she was just sacked, so those who dislike Morgan McSweeney [the prime minister’s chief of staff] I guess will get behind her.”
However, while describing her as “slightly more left” than Ms Phillipson, they said she is “hardly a socialist”.
Image: Lucy Powell was sacked as leader of the Commons last week. Pic: PA
Some MPs want to avoid a race between Ms Powell and Ms Phillipson, believing there is not much difference in what they offer, but others had more praise for the former, calling her performance at the hustings impressive.
One MP said: “Her pitch is that she’s been the shop steward of the parliamentary Labour Party (PLP) in government, but now she’s not in government she can dedicate herself to the role of deputy leader full time without a department to run. She wants to focus on defining our voter coalition and making sure we’re speaking to them.”
They added that Ms Phillipson might be too busy to fulfil the deputy leadership role, especially with SEND (special educational needs and disabilities) reform coming down the track “which could be a horror show”.
Ms Phillipson has been making the case to MPs about her experience fighting populism in her Houghton & Sunderland South seat in the North East, where Reform UK is on the rise.
Dr Jeevun Sandher said he was won over by the education secretary following her pitch at the hustings in which she also spoke about the cost of living crisis.
The MP for Loughborough told Sky News: “Bridget was strong, articulate, and very impressive. She was able to communicate the deep thought we need to govern well and win the next election.”
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2:07
What do unions want from Labour’s new deputy?
The deputy leadership race was triggered by the resignation of former deputy prime minister and housing secretary Angela Rayner after she admitted underpaying stamp duty on a flat.
The candidates need 80 backers by 5pm Thursday. As of Wednesday evening’s tally, 235 MPs had made their nominations out of Labour’s 398 MPs.
Ms McGovern pulled out on Wednesday afternoon, saying it was “clear that the momentum of this contest had shifted, and I am not going to progress to the next stage”.
The MP for Birkenhead was rumoured to be Number 10’s preference before it was clear Ms Phillipson – who she has since nominated – would enter the race.
Timeline for the race
Many Labour MPs are keen to see someone who would work constructively with the prime minister to avoid the party becoming more divided.
There are also calls for the deputy leader to be from the north to balance out the number of cabinet ministers who represent London seats – which both Dame Emily and Ms Riberio-Addy do.
If more than one candidate secures 80 nominations by Thursday evening, they will then need to gain backing from either three of Labour’s affiliate organisations, including two trade unions, or 5% of constituency parties.
That process will continue until 27 September, meaning a contested election threatens to overshadow the party’s annual conference that begins in Liverpool the next day.
The successful candidates will then appear on the ballot for a vote of all party members and affiliated party supporters, which will open on 8 October and close on 23 October at 12pm.
The winner will be announced on Saturday 25 October.
Labour’s deputy leadership contest is on the brink of becoming a two-horse race between Bridget Phillipson and Lucy Powell, as the other three candidates scramble for nominations.
The official tally from the Parliamentary Labour Party (PLP) on Wednesday night put Ms Phillipson, the education secretary, ahead with 116 nominations.
Ms Powell, the former Commons leader who was ousted in Sir Keir Starmer’s reshuffle last week, is behind with 77 – just three shy of the 80 needed to make it to the next round.
Bell Ribeiro-Addy, Paula Barker and Dame Emily Thornberry all had support from 15 or fewer MPs as of Wednesday evening, fuelling speculation they could follow in the footsteps of housing minister Alison McGovern and pull out.
Ms Barker, the MP for Liverpool Wavetree, told Sky News she was “genuinely undecided” and had a lot to consider.
Image: Education Secretary Bridget Phillipson kept her job in the recent reshuffle. Pic: PA
Ms Barker, a former trade union official, has challenged the government on Gaza and welfare cuts and is part of the newly formed soft-left “Mainstream group”.
Her allies are keen for her to stay in the race, with one telling Sky News she “outshone the others by miles” during an online hustings event for MPs, and would be a “real alternative for the membership”.
Her supporters are expected to throw their weight behind Ms Powell if she does drop out, with one saying of the Manchester Central MP: “She is closer to Andy Burnham, and she was just sacked, so those who dislike Morgan McSweeney [the prime minister’s chief of staff] I guess will get behind her.”
However, while describing her as “slightly more left” than Ms Phillipson, they said she is “hardly a socialist”.
Image: Lucy Powell was sacked as leader of the Commons last week. Pic: PA
Some MPs want to avoid a race between Ms Powell and Ms Phillipson, believing there is not much difference in what they offer, but others had more praise for the former, calling her performance at the hustings impressive.
One MP said: “Her pitch is that she’s been the shop steward of the parliamentary Labour Party (PLP) in government, but now she’s not in government she can dedicate herself to the role of deputy leader full time without a department to run. She wants to focus on defining our voter coalition and making sure we’re speaking to them.”
They added that Ms Phillipson might be too busy to fulfil the deputy leadership role, especially with SEND (special educational needs and disabilities) reform coming down the track “which could be a horror show”.
Ms Phillipson has been making the case to MPs about her experience fighting populism in her Houghton & Sunderland South seat in the North East, where Reform UK is on the rise.
Dr Jeevun Sandher said he was won over by the education secretary following her pitch at the hustings in which she also spoke about the cost of living crisis.
The MP for Loughborough told Sky News: “Bridget was strong, articulate, and very impressive. She was able to communicate the deep thought we need to govern well and win the next election.”
Please use Chrome browser for a more accessible video player
2:07
What do unions want from Labour’s new deputy?
The deputy leadership race was triggered by the resignation of former deputy prime minister and housing secretary Angela Rayner after she admitted underpaying stamp duty on a flat.
The candidates need 80 backers by 5pm Thursday. As of Wednesday evening’s tally, 235 MPs had made their nominations out of Labour’s 398 MPs.
Ms McGovern pulled out on Wednesday afternoon, saying it was “clear that the momentum of this contest had shifted, and I am not going to progress to the next stage”.
The MP for Birkenhead was rumoured to be Number 10’s preference before it was clear Ms Phillipson – who she has since nominated – would enter the race.
Timeline for the race
Many Labour MPs are keen to see someone who would work constructively with the prime minister to avoid the party becoming more divided.
There are also calls for the deputy leader to be from the north to balance out the number of cabinet ministers who represent London seats – which both Dame Emily and Ms Riberio-Addy do.
If more than one candidate secures 80 nominations by Thursday evening, they will then need to gain backing from either three of Labour’s affiliate organisations, including two trade unions, or 5% of constituency parties.
That process will continue until 27 September, meaning a contested election threatens to overshadow the party’s annual conference that begins in Liverpool the next day.
The successful candidates will then appear on the ballot for a vote of all party members and affiliated party supporters, which will open on 8 October and close on 23 October at 12pm.
The winner will be announced on Saturday 25 October.
I ask Ross, 27, if the flying of the flags is timed to coincide with concerns about immigration.
“Yes,” he replies. “My personal stance on it is, yes, this is us saying ‘you’re in our country’, right?
“This is what we stand for, you bow to this flag how we do, right, and you shouldn’t be doing illegal things, and for example, raping the women and committing crimes, which we don’t agree with.”
Image: Ross says there’s nothing wrong with being patriotic
He tells me some of the handful of people he’s with went to the same school as him. But Octavia, the only woman in their group, only met them recently.
“She bumped into us the other day, and now she’s a full-fledged flagger,” Ross says.
Octavia, 27, lifts her jumper to reveal she’s wearing an England flag dress.
“I saw him putting up the flags and I genuinely wondered why,” she says.
“He kind of explained to me, like, we’re protecting people of Britain, we are spreading awareness, that is literally all, and I was really happy to get involved”.
Image: Octavia says she was happy to get involved
As the next flag is being put up, a man walks past and breaks into song.
“No surrender, no surrender, no surrender to the boats coming over,” he sings.
Ross, filming him, thanks him for his “performance”.
Many opinions but few solutions for debate that crosses dividing lines
Over the course of an evening in Lichfield, we struggled to find anyone who didn’t have an opinion on the flags appearing around the town.
Yet we did find people who were reticent to speak on camera, particularly those opposed to the flags being there.
This is a town where around 93% of residents were born in England, according to the census in 2021.
Unlike many British towns and cities, there is little visible evidence of the mass migration this country has experienced in recent decades.
Octavia, the newest recruit to the group of “flaggers” we met, grew up in Leicester, where just under 58% of people were born in England.
After meeting people opposed to the flags in Lichfield, she told me “they’re wealthy, they live in a nice area, they don’t actually have to go through the struggles that everybody else does”.
She then revealed her opposition to migrant hotels is in part because she was once at risk of homelessness and didn’t get state support.
But from what we saw, it would be wrong to conclude that there are obvious dividing lines in this debate.
On both sides, there were people from a range of different backgrounds, young and old.
Some see a display of pure patriotism. To others, it’s blatant nationalism that has to stop.
But in these uneasy times, the removal of any flags has been seized on as a political act that has sparked anger in communities.
A woman sees it all happen and tells us her husband has written to the council to ask for the flags to be removed.
She’s unhappy about how it may make the town feel for some people.
But she doesn’t want to go on camera – or even have her words recorded.
Image: Bob says the number of flags going up has become ‘extreme’
I ask Ross about his political views.
He says he doesn’t belong to any party, but he tells me he supports Tommy Robinson – and had been with him the previous evening.
He got the flags they’re putting up from him.
Further down the street, we meet Bob. He’s just out for dinner. We get talking about the flags.
“It’s not a racist thing just to be wanting to look after your people,” Ross tells him.
Bob agrees, but is concerned about why flags are going up now.
“There’s nothing wrong with showing the English flag,” her husband agrees.
It’s hard to find anyone who doesn’t have a view on the flags appearing around the town. We leave Lichfield with a sense that they’re provoking strong feelings on both sides of a very live national debate.