Four traders to challenge rate-rigging convictions after Supreme Court ruling

Four traders who were convicted of rigging interest rates are set to challenge their convictions after the Supreme Court ruled in favor of two other traders who were acquitted. The four traders argued they were wrongly prosecuted for normal commercial practices. The Serious Fraud Office declined to comment on their appeal. The Libor scandal emerged in 2012, with evidence of widespread rate manipulation.

London — In a significant development in the ongoing Libor scandal, the Supreme Court has quashed the convictions of four traders who were jailed for manipulating benchmark interest rates. The move follows the court's recent decision to overturn the convictions of Tom Hayes and Carlo Palombo, two former investment bank traders [1].

The four traders, Jay Merchant, Jonathan Mathew, Philippe Moryoussef, and Christian Bittar, are seeking acquittal on appeal. They argue that they were wrongly prosecuted for normal commercial practices, a stance supported by the Supreme Court's ruling on Hayes and Palombo [2].

The convictions of the four traders stem from an investigation by the Serious Fraud Office (SFO) into claims that traders manipulated key interest rate benchmarks by submitting false information to the market [3]. The investigation, which began in 2012, led to nine convictions for fraud.

The Supreme Court's decision to quash the convictions of Hayes and Palombo was based on the fact that the judges in their cases gave inaccurate instructions to jurors, effectively preventing them from considering whether the traders had acted dishonestly [1]. Similarly, the four traders argue that they were not given a fair trial.

The SFO has declined to comment on the appeal, stating that it has considered the judgment and the full circumstances carefully and determined it would not be in the public interest to seek a retrial [2].

The Libor scandal, which emerged in 2012, involved widespread manipulation of the London Inter-Bank Offered Rate (Libor) and its euro currency equivalent, Euribor. These benchmarks were used to set the interest rates on trillions of dollars of loans and other financial products around the world [1].

The benchmarks were vulnerable to manipulation because they were set by banks that could profit from swings in interest rates. Each day, major international banks were asked to submit the interest rate at which they could borrow money from other banks, and an average of those submissions was used to set the daily Libor and Euribor rates [1].

Libor and Euribor were phased out in recent years, in part because they were seen as worsening the financial crisis [1].

References:
[1] https://apnews.com/article/libor-trading-scandal-britain-banking-hayes-palombo-bd71ca38eaa6970951932c19bcdbe4d6
[2] https://www.yahoo.com/news/articles/jailed-traders-mount-bid-quash-190830860.html
[3] https://www.dailymail.co.uk/news/article-14931999/City-traders-jailed-rigging-rates-convictions-quashed.html