Tom Hayes' Libor Rigging Conviction Overturned by UK Supreme Court

 Tom Hayes' Libor Rigging Conviction Overturned by UK Supreme Court

Tom Hayes, once a high-profile trader at UBS and Citigroup, has finally won his long-running fight to clear his name. On Wednesday, the UK Supreme Court quashed his 2015 conviction related to Libor interest rate rigging. Hayes had been the first person in the world to be jailed over the Libor scandal, receiving a 14-year sentence later reduced to 11. He served five and a half years before being released in 2021.

The Supreme Court found that the original jury had been misdirected by the trial judge, who incorrectly said that banks could not take commercial interest into account when submitting Libor estimates. Hayes’ argument had long been that there was no legal restriction preventing banks from considering their own interests during submissions. The justices agreed this error led to an unfair trial and ruled that his conviction was unsafe and could not stand.

This decision also applied to Carlo Palombo, a former Barclays trader jailed in 2019 for rigging Euribor, the eurozone equivalent of Libor. His conviction was also overturned. Both men had been among a wave of traders prosecuted following the global rate-rigging scandal that rocked the financial world.

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Libor, the London Interbank Offered Rate, once influenced contracts worth an estimated $400 trillion globally  from mortgages and loans to complex financial products. It was phased out in 2023, but the scandal surrounding its manipulation has had lasting consequences. Banks and brokers faced over $9 billion in fines, and 19 traders were convicted in the UK and the US.

The recent Supreme Court ruling may have a ripple effect. Legal experts believe the decision could trigger reviews of several other convictions, including up to nine secured by the UK’s Serious Fraud Office (SFO). Between 2013 and 2019, the SFO brought charges against 20 individuals for rate-rigging. While nine were convicted, 11 were acquitted.

After reviewing the Supreme Court's judgment, the SFO said it would not pursue a retrial of Hayes or Palombo, as doing so would not be in the public interest. Legal analysts now say the UK has aligned its stance with the U.S., where similar Libor-related convictions were also overturned in 2022.

For Hayes, the ruling marks the end of a long legal battle that left him as the public face of the scandal. Speaking at a press conference, he said he had always believed the outcome would eventually come. Though justice has finally been served in his eyes, the fallout may only just be beginning for the justice system and the regulators who pursued the high-profile prosecutions.