In fact, some of the traders convicted in the Libor rate-rigging scandal are now appealing to have their convictions overturned. This move comes on the heels of the Supreme Court’s recent decision to quash the convictions of two traders, Tom Hayes and Carlo Palombo, who argued that they had been wrongfully prosecuted for standard commercial practices.
The Libor scandal sure did — it broke in 2012 and revealed the appalling truth that banks were rigging the London Interbank Offered Rate. They accomplished this by increasing rates and covering up their emerging financial crises that appeared during the 2008 international monetary disaster. Libor, an important benchmark for many loans between banks, became the target of allegations of misbehavior after the crisis. In the wake of the scandal, regulatory authorities began probing whether traders were colluding to engage in illegal practices to ensure profit.
The Serious Fraud Office (SFO) headed up these investigations, exposing a pattern of banks colluding to raise and/or lower Libor rates to manipulate the index. This manipulation provided banks a path to profit from trading, all while hiding their economic distress. After all, this issue was at the core of the 2008 financial meltdown. Its effects can still be felt throughout the banking industry today.
As of June 30, 2023, Libor has been officially discontinued. Now, Euribor, the European equivalent, is being reformed in order to stop this kind of mischief from recurring. Against this backdrop, four traders—from Citigroup, Deutsche Bag and Société Générale – Jay Merchant, Jonathan Mathew, Philippe Moryoussef, and Christian Bittar–are appealing their convictions. They intend to appeal after we recently overturned Hayes and Palombo’s convictions.
“Following the Supreme Court’s landmark decision yesterday to quash the convictions of Tom Hayes and Carlo Palombo, all four of our clients now intend to appeal against their convictions,” – Hickman & Rose
This recent effort for appeals is happening in tandem with significant new research that was first reported by the BBC in March of 2023. The investigation revealed evidence of a larger, state-led “rigging” of interest rates under duress from central banks and governments worldwide during the financial crisis. What these new findings mean could add to the already deadly legal landscape for rate manipulation.
The SFO responded to inquiries about future actions related to the scandal, stating they “considered this judgement and the full circumstances carefully and determined it would not be in the public interest for us to seek a retrial.”
As this situation develops, many are watching closely to see how it will impact public perception of financial institutions and their accountability. The future appeals might soon bring the unflattering, yet fascinating, underworld of banking commercial practices to light. This has been particularly important during one of the most tumultuous periods in our country’s economic history.
