On Friday, the Financial Conduct Authority announced it was scrapping permanent market prohibitions for traders who had been found guilty of manipulating benchmark interest rates. "We have revoked the bans of Colin Bermingham, Philippe Moryoussef, Jonathan Mathew and Christian Bittar," the regulator said. "The FCA will take no further action against these individuals in relation to this matter."
Following a one-week interval since the Court of Appeal threw out the convictions of five ex-Barclays Plc bankers and former Deutsche Bank AG trader Christian Bittar, the regulator took its step. Those reversals followed the UK Supreme Court's decision to overturn Tom Hayes' conviction. Hayes, the first and most high profile trader convicted in the rate cases, had his verdict ruled unsafe after judges found the jury was misdirected, and the court said both he and Carlo Palombo, another trader, ought to be exonerated. Lawyers for the appellants argued the legal errors mirrored those in the cases of the five Barclays traders, so their convictions should be overturned.
The benchmarks in question supported in excess of $350 trillion in loans and securities. The scandal resulted in almost $10 billion in global fines imposed on a dozen banks and brokerage firms. Prosecutions by the Serious Fraud Office yielded nine fraud convictions, only one of which still remains, and that matter is also slated for appeal.
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The bottom line: the legal unwind from crisis-era rate cases is still running, which can reduce legacy overhangs for the banks involved while keeping compliance and litigation risk on your portfolio radar.
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