Libor Rate Rigging: Convictions Quashed by Supreme Court
Former City traders Tom Hayes and Carlo Palomo See Convictions Quashed by Supreme Court
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London, UK – In a landmark decision that has sent ripples through the financial world, the UK’s Supreme Court has quashed the convictions of former City traders Tom Hayes and Carlo Palomo.The pair had been found guilty of manipulating the Libor and Euribor interest rates, but their appeals have now been upheld by the highest court in the land.
The ruling, delivered today, means that both Hayes and Palomo are now free from their convictions. The Supreme Court’s decision centres on two key legal questions that were central to the appeal.
The Legal Battle: Dishonesty and Rate Submission
The core of the legal challenge revolved around the interpretation of what constitutes dishonesty in the context of submitting benchmark interest rates like Libor (the London Interbank offered Rate) and Euribor (the Euro Interbank Offered Rate).
The Supreme Court justices had to consider:
Automatic Dishonesty: Whether a submission to Libor or Euribor is automatically deemed dishonest if it is influenced by a trade made to profit from market movements.
Rate Submission Interpretation: Whether a Libor or Euribor submission should represent the single cheapest rate at which a bank could borrow, or if it could be selected from a range of potential borrowing rates.
A Long Road to the Supreme Court
The journey for Hayes and Palomo to the Supreme Court has been a protracted one. Following their convictions, they sought to appeal to the Court of Appeal. Last march, the Court of Appeal justices upheld both convictions and rejected their request to appeal to the Supreme Court. However, they did certify their case, allowing for a direct application to the Supreme Court.
Hayes and Palomo then applied directly to the Supreme Court, which accepted their case. The hearing took place back in March, with the justices deliberating on the complex legal arguments presented.
The Verdict: Convictions Quashed
Today, Mr Justice Leggatt, speaking at the Supreme Court, announced the unanimous decision of all the Justices. the appeal has been allowed, and consequently, both convictions have been quashed. This decision marks a significant turning point for the former traders and raises significant questions about the prosecution of financial misconduct cases.
This story is being updated.