The Court of Appeal has upheld the convictions of Tom Hayes and Carlo Palombo, two traders who spent years in prison for “rigging” global interest rates.
Hayes and Palombo received permission to appeal their convictions last year by the Criminal Cases Review Commission after the United States overturned all convictions related to LIBOR rigging.
Prosecutors on both sides of the Atlantic have argued that traders committed fraud by submitting LIBOR rates that were influenced by commercial decisions. However, defence teams have consistently argued that LIBOR rates could be both accurate and commercially-influenced – and that the LIBOR system was set up with banks’ commercial interests in mind.
Experts have told Disruption Banking that “LIBOR was always commercial, it was always meant to work commercially, that was always part of the system – nobody who is being honest will tell you otherwise.” The activities of Hayes, Palombo, and the dozens of other traders that were prosecuted represented perfectly normal behaviour at the time.
Lawyers representing Matthew Connolly, who was charged with rigging LIBOR rates while working for Deutsche Bank in New York, successfully argued this case. This means that the United Kingdom is the only country in the world to consider this a criminal offence.
However, the appeal judge in the Hayes and Palombo case has said that the US rulings do not “cast doubt on the correctness of the previous decisions as a matter of English law […] both appeals are dismissed.”
Hayes’ solicitor Karen Todner has said she is exploring whether they can appeal this decision at the Supreme Court. She also told Disruption Banking that she is “very disappointed” with the decision but that “we’re not giving up.”
Author: Harry Clynch
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