A panel at the Court of Appeal set aside the convictions of five ex-Barclays Plc traders linked to the benchmark rate scandal. Alex Pabon, Jay Merchant and Jonathan Mathew were found guilty in 2016 of conspiracy to defraud for their roles in Libor manipulation and received prison sentences. Philippe Moryoussef and Colin Bermingham were later convicted in Euribor cases in 2018 and 2019.
These decisions landed after the UK Supreme Court overturned the conviction of Tom Hayes, the former UBS Group AG trader who became the most prominent figure in the prosecutions. The justices concluded Hayes' jury had been misdirected and said he and fellow trader Carlo Palombo should be cleared. Lawyers for the Barclays appellants argued that the same legal flaws identified in Hayes' case ran through their trials, warranting the quashing of their verdicts.
Overturned convictions reshape how financial misconduct gets prosecuted. Market Briefs covers these cases free every weekday.
"A wrong turn occurred in August 2015 when a jury came to be directed in Hayes' case," said Katherine Hardcastle, who represents Jonathan Mathew and Philippe Moryoussef. "The unsafety of these convictions is not contested" by the SFO.
Jay Merchant wrote in an emailed statement, "After more than 10 years, I am deeply grateful to the UK Supreme Court for the judgment that ultimately made it possible to correct this injustice." "I now look forward to moving forward with my life and ensuring that those responsible for what happened are held fully accountable."
"All involved in the criminal justice system should now ask themselves not only how this error came to be made and repeated, but also why it took so long to correct," said Tom Bushnell of Hickman & Rose, who represented the traders. "The Serious Fraud Office, in particular, must reflect on how its repeated failure to ensure these trials were conducted fairly contributed to the collapse of its most significant series of prosecutions of the past fifteen years."
"The SFO remains committed to pursuing the most serious cases of fraud, bribery and corruption," the agency said after Wednesday's decision. It also noted, "The Supreme Court found that there was ample evidence on which a properly directed jury could have convicted Tom Hayes and Carlo Palombo."
The rate-fixing saga touched benchmarks underpinning more than $350 trillion in loans and securities and triggered nearly $10 billion in fines for about a dozen banks and brokerages worldwide. The SFO's drive produced nine banker convictions for fraud offenses, but this week's reversals underscore how its long, sprawling investigation has largely unraveled. One case is still live: The appeal of Christian Bittar - who worked at Deutsche Bank AG and admitted fraud in 2018 - is set for a hearing on Friday, and the SFO says it will oppose it.
For your wallet, the takeaway is simple: scandals this big ripple for years, and legal U-turns can rewrite what we thought we knew about accountability in finance. It will not change your mortgage rate tomorrow, but it does shape how markets police behavior and how much trust to put in the rules that set the price of money.
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