plowunited.net – The Supreme Court will soon rule on the appeals of two former City traders convicted of rigging interest rates. These traders, Tom Hayes and Carlo Palombo, face potential overturning of their convictions. The case has raised serious concerns among senior politicians about possible miscarriages of justice. The ruling could affect nine related criminal trials and numerous convictions. The Serious Fraud Office (SFO) opposes the appeals, arguing the convictions are justified.
Tom Hayes was the first trader jailed for Libor rigging in 2015. The US Department of Justice and the SFO accused him of leading a global conspiracy to manipulate rates. Hayes received a 14-year sentence, the longest in the scandal. Alongside Palombo, Hayes awaits the Supreme Court decision that could rewrite the history of this 17-year scandal.
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Background on Libor and the Allegations
Libor (London Interbank Offered Rate) served as the world’s key benchmark for interest rates from 1986 until 2024. Banks daily reported the rates at which they could borrow money. Traders like Hayes and Palombo allegedly influenced these submissions by requesting “high” or “low” rates to benefit their banks’ trading positions. The rate shifts were small, often only 0.00125%, but the manipulation was viewed as illegal by prosecutors.
Hayes and Palombo claim their actions were part of normal banking practices, aligned with commercial interests, and not criminal. However, the courts ruled that any attempt to adjust rates for gain was “dishonest and wrong.” The SFO described Palombo as a “crook” motivated by greed, a claim the traders deny.
Evidence of Wider Institutional Pressure and Controversy
Evidence later surfaced showing central banks and governments pressured banks to manipulate Libor on a much larger scale during the 2008 financial crisis. Unlike the traders’ small nudges, these official pressures caused significant false rate shifts. No government or central bank officials faced prosecution.
The US courts have since overturned similar convictions, recognizing that such conduct was not illegal. The US Department of Justice dropped charges against Hayes, and all related US convictions were dismissed. In contrast, UK convictions remain intact, sparking debate over fairness and consistency in justice.
Legal Battle and Public Concerns
The traders’ appeals had faced multiple rejections in UK courts from 2015 to 2019. But the Criminal Cases Review Commission (CCRC) reopened Hayes’s case after US courts acquitted similar defendants. In 2024, the Court of Appeal finally allowed the case to proceed to the Supreme Court on a matter of public legal importance.
The Supreme Court is now examining whether judges incorrectly instructed juries that the traders’ conduct was unlawful, rather than leaving the question to jurors. The SFO counters that the defendants never challenged jury instructions at trial.
Prominent politicians, including John McDonnell and David Davis, argue the traders were unfairly scapegoated. They call for a public inquiry into the broader scandal, highlighting possible government and central bank wrongdoing hidden from juries.
Implications of the Supreme Court Decision
If the Supreme Court rules in favor of Hayes and Palombo, all remaining UK convictions related to Libor rigging could be quashed. This would overturn a major financial scandal’s criminal outcomes after nearly two decades. The ruling might also increase pressure for transparency and investigation into government roles.
The case highlights complex questions about business ethics, legal standards, and the balance between commercial practices and criminal liability. For now, Hayes and Palombo await the Supreme Court’s judgment, hoping to clear their names and challenge a narrative that has haunted them for years.
