Leadership2 publishersIndependently confirmed2 min readPublished
SFO's Libor prosecutions lose five more Barclays convictions at the Court of Appeal
Five former Barclays traders had Libor and Euribor convictions quashed by the Court of Appeal after the Serious Fraud Office chose not to oppose. The SFO still says its evidence was ample, so it now defends the investigations while giving up the verdicts they produced.
The Board Room · Leadership desk
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What happened
- The ruling follows the Supreme Court's decision last year to overturn the convictions of Tom Hayes and Carlo Palombo, the traders who became the face of the Libor scandal.
- Lord Justice Edis said the five convictions would be quashed and that the court would set out its full reasons later.
- The court has yet to hear the appeal of Christian Bittar, a former Deutsche Bank trader who argues his conviction should also go, though the SFO says it is safe.
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Why it matters
- decision After accepting the error in five Barclays cases, the SFO now has to argue that Christian Bittar's Deutsche Bank trial avoided it, or give up that conviction as well.
- precedent If the written reasons accept the traders' lawyer's claim that one error ran through the other Libor and Euribor prosecutions, any remaining conviction from those trials gains a ready ground of appeal.
- exposure Compliance training and surveillance policies that use the Barclays cases as worked examples of benchmark misconduct now point to verdicts that no longer stand.
"The Supreme Court found that there was ample evidence on which a properly directed jury could have convicted Tom Hayes and Carlo Palombo. We deemed it was not in the public interest to seek retrials of these two individuals," Jason Williams, head of division at the SFO, said [14]. On the Barclays five, he said: "After carefully considering this judgment and the full circumstances we do not oppose the appeals of five individuals convicted by juries in relation to Libor and Euribor. We communicated our decision last year to each of the people affected by the judgment." [15] The SFO made that decision before the Criminal Cases Review Commission referred the cases in January [19].
Tom Bushnell, the Hickman & Rose partner who represented the traders, made the critic's case. The SFO "must reflect on how its repeated failure to ensure these trials were conducted fairly contributed to the collapse of its most significant series of prosecutions of the past fifteen years," he said [13]. He also said the ruling "recognises that this error went on to be repeated in the other Libor/ Euribor prosecutions" [12]. Williams closed on the office's future work. The SFO "remains committed to pursuing the most serious cases of fraud, bribery and corruption," he said [16].
For compliance teams, the record so far points at the trials. Williams's own phrase, a "properly directed jury", puts the Hayes and Palombo problem in the directions the jury was given [14]. Bushnell's complaint is about how fairly the trials were run [13]. The coverage does not describe the evidence the juries heard, so it cannot show whether internal chat messages or any other material were the weak point. On this record, any lesson about the reliability of chat-log evidence would run ahead of the facts. In my view, the SFO's confidence in its evidence also counts for less than it sounds. Its claim that a properly directed jury could have convicted Hayes and Palombo will not be tested, because it chose not to retry them [14].
The prosecutions were brought more than a decade ago [4]. Prosecutors cast the traders as a symbol of banker greed during the public anger over the 2008 financial crisis, the BBC reported [6]. Counting Hayes and Palombo, seven former traders have now had their convictions quashed across the two rulings [18]. "Having this conviction quashed is not simply about correcting the record; it's about finally having validation that this is an injustice that never should have happened," Jonathan Mathew, one of the five, said [11]. Barclays declined to comment [17].
What to watch
- Lord Justice Edis's full written reasons, which will show whether the error lay in jury directions or reached the evidence itself.
- The Court of Appeal's hearing of Christian Bittar's appeal, where the SFO maintains his conviction is safe.