Court quashes convictions of six traders in Libor scandal

The Court of Appeal in London has overturned the convictions of six traders, including former UBS trader Tom Hayes and five individuals formerly employed by Barclays. The ruling, issued in July of last year, clears the traders of manipulating the Libor and Euribor benchmark interest rates, which were used to set borrowing costs for personal loans and mortgages.

Lengthy Battle for Justice

Tom Hayes, who served five-and-a-half years in jail, has been campaigning for 14 years to clear his name. He stated that his arrest at the age of 32 marked the beginning of a long fight for justice. The five former Barclays traders whose convictions were also quashed are Jay Merchant, Jonathan Mathew, Philippe Moryoussef, Alex Pabon, and Colin Bermingham. The same court also allowed the appeal of ex-Deutsche Bank trader Christian Bittar for conspiracy to defraud.

In total, 37 traders faced prosecution in the UK and the United States for their alleged involvement in manipulating Libor and Euribor. The process involved banks submitting estimates of their borrowing costs, from which an average rate was calculated. Prosecutors argued that traders asking for their submissions to be adjusted to benefit their banks' trades constituted a conspiracy to defraud. However, the traders maintain their actions were within employer knowledge and regulatory awareness, with some suggesting government encouragement to maintain consumer confidence.

Ongoing Legal Actions and Calls for Inquiry

While some convictions have been overturned, others, like that of Peter Johnson, convicted in October 2014, are still being contested. Carlo Palombo, a former Barclays trader sentenced in 2019, also had his conviction quashed on the same day as Hayes. Jay Merchant is the only one of the acquitted Barclays traders to have declared an intention to sue his former firm, though others may follow. Tom Hayes is pursuing a significant legal action in the United States, seeking $400 million in damages from UBS.

Sir David Davis, a Conservative MP who has supported the traders' campaign, has drawn parallels between this case and the Post Office scandal, calling for a deeper inquiry. He stated that while the Post Office case involved more people, this case represented a deeper miscarriage of justice. Jonathan Mathew, one of the former Barclays traders, has called for the former director of the Serious Fraud Office, David Green, to relinquish his knighthood, criticising the SFO's handling of the Libor investigation, which he described as a 'public disaster' costing £36 million.

The traders involved have described their experience as 'hell', facing public condemnation and reputational damage. Many have been unable to return to careers in the City's financial sector. Hayes noted that his conviction impacted his personal life, including his marriage and his relationship with his son, who was a toddler when Hayes was arrested and is now a teenager.

What Happens Next

Tom Hayes's damages claim against UBS in the United States is ongoing. It remains unclear if other traders will pursue legal action against their former employers or if a formal inquiry into the prosecutions will be launched.