Ex-bankers jailed for manipulating interest rates have convictions quashed

The convictions of five bankers jailed after being accused of manipulating interest rates have been overturned at the Court of Appeal after a “wrong turn” which led to unfair errors in their trials.

Jonathan Mathew, Jay Merchant, Alex Pabon, Philippe Moryoussef and Colin Bermingham were jailed between 2016 and 2019 for offences connected to manipulating the London Inter-Bank Offered Rate (Libor) and the Euro Interbank Offered Rate (Euribor).

The Serious Fraud Office (SFO) admitted in August that the group’s convictions may be unsafe in the light of a Supreme Court ruling last July which quashed the convictions of two traders, Tom Hayes and Carlo Palombo.

Lawyers for the five men argued that the jury directions given in their trials were near-identical to those created for the trial of Mr Hayes which were found to be wrong by the Supreme Court.

Barristers for the SFO told the court it did not oppose the appeals and Lord Justice Edis, sitting with Mr Justice Goose and Mr Justice Moody, quashed the convictions on Wednesday.

Former Barclays employees Mr Mathew, Mr Merchant and Mr Pabon were jailed for four years, five-and-a-half years and two years and nine months respectively in 2016 after being convicted at trial of conspiracy to defraud.

Mr Bermingham, a former managing director at Barclays, was sentenced to five years in 2019.

Former Barclays trader Mr Moryoussef was sentenced in his absence in 2018 to eight years’ imprisonment, having fled to his native France before being convicted at trial.

France refused to extradite him, saying the offence was not a crime in France at the time.

In joint written submissions to the court on behalf of all five men, barristers Andrew Thomas KC, Tom Allen KC and Katherine Hardcastle said: “The appellants’ common submission is that their trials were unfair, and their convictions are unsafe, for the parallel reasons to those identified by the Supreme Court.

“The compelling nature of that position has fairly been recognised by the SFO and the Court of Appeal is respectfully invited to quash the convictions accordingly.”

The barristers also argued that money paid by the five men for confiscation orders and prosecution costs should be returned with interest.

During the hearing in London, Ms Hardcastle, who represents Mr Merchant, Mr Mathew and Mr Moryoussef, said a “wrong turn” had been taken in Mr Hayes’ case which affected the subsequent trials.

She said: “The directions given in each trial were wrong in law and the convictions are unsafe.”

Andrew Thomas KC, representing Mr Bermingham, told judges he is now 70-years-old and joined Barclays when he was 18.

The Libor rate was previously used as a reference point around the world for setting millions of pounds worth of financial deals, including car loans and mortgages.

It was an interest rate average calculated from figures submitted by a panel of leading banks in London, with each one reporting what it would be charged were it to borrow from other institutions.

Euribor was created along with the euro currency in 1999 as a benchmark rate of interest for transactions in euros.

In 2012, the SFO began criminal investigations into traders it suspected of manipulating Libor and Euribor, and brought prosecutions against 20 individuals between 2013 and 2019, seven of whom were convicted at trial, two pleaded guilty and 11 were acquitted.

Lord Justice Edis will give reasons for the decision later on Wednesday and make rulings about the consequences of the decision on Thursday.

Mr Mathew said: “For the last 10 years, the stain of a criminal conviction has been a burden I have carried every minute of every day.

“The injustice could have consumed me but with the support of my wife and family, I have not let it define me.

“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.”

Mr Moryoussef said he had lost his work, career reputation and income.

He said: “Today, I am regaining my soul and for the first time I can envision my next chapter in peace.”

Tom Bushnell, from solicitors Hickman & Rose, said: “In Jay Merchant and Jon Mathew’s case, it took over a decade for this wrong to be righted. In Philippe Moryoussef’s case, over eight years. Their lives have been turned upside down as a result.

“All involved in the criminal justice system should now ask themselves not only how this error came to be made and repeated, but also why it took so long to correct.”

Jason Williams, head of division at the Serious Fraud Office, said: “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.

“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.

“The SFO remains committed to pursuing the most serious cases of fraud, bribery and corruption.”

On Friday, the court will consider an appeal from Christian Bittar, who was jailed for more than five years in 2018 – however the SFO argues his conviction remains safe.