Former traders take legal fight to Supreme Court

Two former City traders have spoken of their satisfaction after the Court of Appeal certified there was a point of law in their cases that the Supreme Court may wish to consider.

Both traders’ convictions for rate-rigging were referred to the Court of Appeal by the Criminal Case Review Commission. The referral followed the US second circuit Court of Appeal decision in Connolly and Black, clearing two other traders convicted in 2022. Outstanding charges against Hayes in the US were also dropped.

Following a three-day hearing earlier this year, both appeals were dismissed on all grounds. Hayes and Palombo sought permission to appeal to the Supreme Court.

Permission to appeal was denied, but Lord Justice Bean, Lord Justice Popplewell, and Mr Justice Bryan certified that a point of law of general public importance relating to the proper construction of the London Inter-Bank Offered Rate (LIBOR) and Euro Interbank Offered Rate (EURIBOR) definitions, was involved in their decision. The order added: ‘It should be for the Supreme Court to decide whether the point of law is one which it ought to consider in the light of the consistent series of decisions of the Court of Appeal.’

Hayes, 44, was convicted in 2015 of multiple charges of conspiracy to defraud in relation to manipulations of the LIBOR. He was sentenced to 14 years’ imprisonment, later reduced to 11 years. He has always maintained his innocence.

Palombo, 45, was convicted of conspiracy to defraud by rigging the EURIBOR benchmark interest rate between 2005 and 2009.  He was sentenced to four years’ imprisonment following a 2019 trial at Southwark Crown Court.

Hayes said: ‘I’m delighted that, at the fifth attempt, the court has finally and correctly certified this as a point of law of public importance. The IBOR traders have long insisted that submitting numerically truthful values was truthful, genuine and honest. Now the Supreme Court will have the opportunity to decide if the presence of commercial consideration made those truthful rates criminal. It’s time for the UK legal system to now align with the rest of the world and for these miscarriages of justice to be corrected.’

Palombo said: ‘[I] hope that finally the wrong that we have both experienced will be corrected.’

Karen Todner, Hayes’ solicitor, said: ‘The Court of Appeal has recognised the significance of the decisions in the IBOR cases and I am delighted to say they have certified a point of public importance to be considered by the Supreme Court. We must now apply to the Supreme Court for permission for the appeal to be heard. Tom’s legal team of myself, Adrian Darbishire KC and Tom Doble will continue to do everything in our power to overturn this miscarriage of justice.’

Ben Rose, founding partner of Hickman & Rose, is representing Palombo with Tim Owen KC, Katherine Hardcastle and Tim James Matthews. Rose said: ‘The Court of Appeal has ruled on the construction of LIBOR and EURIBOR five times now, but this is the first time that the court has certified that a point of law of general public importance is involved, thereby recognising that the Supreme Court may wish to consider it. I sincerely hope that the Supreme Court will take up this opportunity.’

Caroline Greenwell, partner at Charles Russell Speechlys, said: ‘The traders may not be comforted by the fact that there are currently no Supreme Court justices with a criminal justice background. A possible reform that has been mooted by a number of commentators is to introduce a requirement for one permanent justice of the Supreme Court to have a background in criminal law. In Chandler v The State No 2 (Trinidad and Tobago), heard by the Judicial Committee of the Privy Council in November 2021, a similar issue arose. Lord Hughes was brought out of retirement to sit on a nine-person panel to ensure there was criminal representation. Hayes and Palombo may be well advised to consider this precedent.’