Convictions of Five Ex-Barclays Traders Quashed in Rate-Rigging Case

The convictions of five men previously jailed for manipulating interest rates have been overturned at the Court of Appeal. Jonathan Mathew, Jay Merchant, Alex Pabon, Philippe Moryoussef, and Colin Bermingham had been imprisoned between 2016 and 2019 for offenses related to rigging the London Inter-Bank Offered Rate (Libor) and the Euro Interbank Offered Rate (Euribor).

The Serious Fraud Office (SFO) acknowledged in August that the convictions might be unsafe, following a Supreme Court ruling that had previously quashed the convictions of two other traders, Tom Hayes and Carlo Palombo. Lawyers for the five men argued that the jury instructions in their trials were nearly identical to those used in Hayes's trial, which the Supreme Court had deemed incorrect.

The SFO informed the court that it did not oppose the appeals. Lord Justice Edis, sitting with Mr. Justice Goose and Mr. Justice Moody, formally quashed the convictions on Wednesday. The SFO has stated it will not pursue retrials for any of the five former traders.

Colin Bermingham, 70, described the experience outside the courtroom as "hard to take in." Jonathan Mathew stated that the "stain of a criminal conviction" had been a burden for ten years, adding that having the conviction quashed was "about finally having validation that this is an injustice that never should have happened." Philippe Moryoussef commented that he had lost his work, reputation, and income, but felt he was "regaining my soul."

Mathew, Merchant, and Pabon were initially sentenced in 2016 to four years, five-and-a-half years, and two years and nine months respectively for conspiracy to defraud. Bermingham, a former managing director at Barclays, received a five-year sentence in 2019. Moryoussef, a former Barclays trader, was sentenced in his absence in 2018 to eight years' imprisonment after fleeing to France. France refused to extradite him, citing that the offense was not a crime in France at the time.

Lawyers for the five men contended in joint written submissions that their trials were unfair and their convictions unsafe due to the same reasons identified by the Supreme Court. They argued that money paid for confiscation orders and prosecution costs should be returned with interest.

Libor, previously a global benchmark for financial deals including car loans and mortgages, was an average interest rate calculated from figures submitted by a panel of leading London banks. Euribor was established alongside the euro in 1999 as an interest rate benchmark for euro transactions.

The SFO initiated criminal investigations into suspected manipulation of Libor and Euribor in 2012. Between 2013 and 2019, the SFO prosecuted 20 individuals, resulting in seven convictions, two guilty pleas, and 11 acquittals.

Tom Bushnell of solicitors Hickman & Rose noted that "in Jay Merchant and Jon Mathew’s case, it took over a decade for this wrong to be righted." He added that "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 SFO, stated that the Supreme Court found ample evidence for a properly directed jury to convict Tom Hayes and Carlo Palombo. He added that the SFO deemed it not in the public interest to seek retrials for those 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," Williams said, confirming that the SFO communicated its decision to the affected individuals last year. He concluded by reaffirming the SFO's commitment to prosecuting serious cases of fraud, bribery, and corruption.

Dame Vera Baird KC, chairwoman of the Criminal Cases Review Commission, which referred the convictions to the appeal court, stated, "It is only right that these five men have had their convictions quashed today, like Tom Hayes and Carlo Palombo." She added that "During our review and following the Supreme Court judgment, we determined there were no distinguishing factors between these cases, and the jury misdirection as well as legal errors undermined the safety of the convictions."