Tom Hayes, the first banker jailed over the Libor interest rate-rigging scandal in 2015, has cleared his name after the UK’s supreme court overturned a decade-old conviction against the former UBS and Citigroup trader.
A panel of five justices, led by Lord Reed, concluded on Wednesday that the judge in Hayes’s original hearing 10 years ago had given “inaccurate and unfair” instructions to the jury that found him guilty on several charges of conspiracy to defraud. This meant the former banker was ultimately “deprived” of a fair trial.
“The convictions are therefore unsafe and cannot stand,” the supreme court ruled.
The judgment, which follows a three-day hearing in March, ends a long-running legal battle for the 45-year-old and could lead to several other convictions being quashed in the UK.
The ruling also marks a blow for the Serious Fraud Office, which brought the original charges. It said it would not be seeking a retrial.
Outside court Hayes said: “I had 10 years to try and figure out what I was going to say at this moment … It feels very surreal, a little bit like my conviction, like it’s not really happening to me.
“I’m just very grateful to all the justices who heard the appeal. I’m very grateful to all the people who supported me, the strangers and friends alike and … a legal team who’ve worked long hours for little money at times when other people wouldn’t.”
When asked whether he would seek financial compensation, Hayes told the Guardian: “I need to talk to my legal team about what civil remedies I might have, whether some money they took from me I might get back. But really it’s not about money today … family and friends, your liberty and your health – those are the things that are really important.”
The court also quashed the conviction of the banker Carlo Palombo, who was sentenced to four years in prison in 2019 for rigging Euribor – the euro version of Libor. It stated that Palombo’s original case was also compromised as a result of directions by the judge.
Hayes spent five and a half years in prison after being accused of being a ringleader in a vast conspiracy to fix the now defunct London Interbank Offered Rate (Libor) – which was used to price trillions of pounds worth of financial products – between 2006 and 2010.
The wider scandal, which erupted in 2012, led to fines of almost $10bn (£7.4bn) for a dozen banks and brokerages. Hayes maintained his innocence and claimed during his original trial that he was taking part in an “industry-wide” practice, accusing regulators of making him a scapegoat.
He was charged by British and US prosecutors in 2015 and convicted and jailed in the UK that year. He was released from prison in January 2021.
Hayes returned to the UK courts last year to challenge his conviction. In 2022 US judges had overturned the convictions of two former Deutsche Bank traders, Matthew Connolly and Gavin Black, for their part in an alleged Libor-rigging scheme. That decision led to all charges against Hayes being dropped in the US.
The Hayes case was subsequently referred to the court of appeal in 2023 by the Criminal Cases Review Commission, an independent body that investigates potential miscarriages of justice. The CCRC said there was a “real possibility” that the court of appeal would overturn Hayes’s conviction.
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However, the court upheld the guilty verdict last year, saying there was “indisputable documentary evidence” that he had sought to move Libor and that he had made “frank admissions of dishonesty”.
Hayes then appealed to the supreme court, which on Wednesday decided that he was denied a fair trial in 2015: “Mr Hayes was entitled to have his defence to the allegation that he agreed to procure false submissions, as well as his denial that he had acted dishonestly, left fairly to the jury.
“He was deprived of that opportunity by directions which were legally inaccurate and unfair. It is not possible to say that, if the jury had been property directed, they would have been bound to return verdicts of guilty. The convictions are therefore unsafe and cannot stand.”
In the case of Palombo, the court said: “When the flaws in the directions given at Mr Palombo’s trial are considered in combination, it cannot safely be assumed that, without them, the jury would have been bound to convict Mr Palombo, Thus, his conviction also cannot stand.”
The justices said the history of the two cases, which both centred on charges of conspiracy to defraud, “raises concerns about the effectiveness of the criminal appeal system in England and Wales in confronting legal error”.
A Serious Fraud Office spokesperson said: “We have considered this judgment and the full circumstances carefully and determined it would not be in the public interest for us to seek a retrial.”
