On January 21, 2016, the Supreme Court ruled that Tom Hayes and Carlo Palombo did not receive a fair trial. Accordingly, their convictions for rigging key interest rates have been vacated. This decision represents a historic victory for each of the men. They have long stood by their innocence and have long presented themselves as the victims of a miscarriage of justice over the last ten years.
Tom Hayes, previously considered the “ringmaster” of a global fraud conspiracy, was sentenced to the maximum 14 years imprisonment. His co-defendant, Carlo Palombo, was sent to jail for rigging the Libor and Euribor interest rates. These short-term interest rates are key for determining borrowing costs on long-term products like mortgages and commercial loans. In fact, they were one of 19 City traders collectively being accused of this collusive behaviour. In the end, nine of them were imprisoned in the US and UK.
The fight against these wrongful convictions began to come apart in 2022. Fifth, US courts repeatedly found no evidence that the traders had disrupted anything or behaved unlawfully. In the wake of this ruling, the convictions of lots of US traders were overturned. Hayes and Palombo thus became the only people still found guilty for such crimes in the UK. This service, to the best of my knowledge, put them in a unique position.
This is the decision that the Supreme Court announced on Wednesday, which has been celebrated as a huge victory for each of the men. For a decade they’ve struggled and strived, protesting their unjust prosecution. The court’s ruling vacated their convictions. It further laid bare the unequal justice being meted out in various jurisdictions for the manipulation of Libor and Euribor rates.
In four years, regulators convicted 19 traders in furtherance of this scandal. Taken together, this prompted huge public and regulatory backlash. The manipulation ultimately had systemic effects on financial markets, raising borrowing costs worldwide. Taken together, these recent legal developments signal a burgeoning recognition of deep-seated inequities in the judicial process. This is all the more troubling in the face of such grave allegations.