Tom Hayes and Carlo Palombo, two former bankers who were jailed for their involvement in rigging interest rates, are set to have their appeal heard by the Supreme Court. The two men were among 37 City traders found guilty of manipulating rate benchmarks Libor and Euribor. Hayes and Palombo had their conviction appeals dismissed last week, however, senior politicians have called for the Supreme Court to hear their case.
Conservative Sir David Davis and Labour’s John McDonnell have both said they believe the ruling was unfair, whilst former Lord Chancellor Lord Mackay of Clashfern has told the BBC he is “deeply concerned” about the basis on which the men were convicted. Hayes and Palombo have confirmed that they intend to apply to the Court of Appeal for permission to take their cases to the Supreme Court.
The former traders were found guilty of manipulating benchmark interest rates which track what banks pay to borrow cash from each other. Each day, 16 banks would submit an estimate of the cost of borrowing a large sum of cash from other banks and an average would be taken to get the Libor benchmark, with a similar process to get Euribor.
Hayes and Palombo were accused of asking the cash desk to submit those rates “high” or “low” to help their bank’s trades. They have argued that this was normal commercial practice and that they were merely selecting from a range of accurate interest rates on offer on the market. They further argued that the prosecution had not offered any proof that the quoted rates were incorrect, and therefore had not asked for anything false.
The case has caused confusion as the Court of Appeal dismissed the traders’ appeal, stating that they should only have quoted the cheapest interest rates available. However, Serious Fraud Office prosecutor James Hines told the defendants’ legal team that it “was never part of our case” that banks must quote the lowest interest rate available, thereby questioning the basis on which the men were convicted
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