Five Ex-Barclays Traders Have Rate-Rigging Convictions Quashed

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

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

The SFO stated it did not oppose the appeals, and Lord Justice Edis, sitting with Mr Justice Goose and Mr Justice Moody, formally quashed the convictions. The SFO has confirmed it will not pursue a retrial for any of the five individuals.

Colin Bermingham, 70, described the feeling outside the courtroom as difficult to process, stating, "You don't believe it until you hear it." Jonathan Mathew commented that the "stain of a criminal conviction" had been a burden for a decade, but that having it quashed was "validation that this is an injustice that never should have happened." Philippe Moryoussef spoke of regaining his soul after losing his work, career reputation, and income.

Mathew, Merchant, and Pabon, former Barclays employees, were originally sentenced in 2016 to terms ranging from two years and nine months to five and a half years for conspiracy to defraud. Bermingham, a former managing director at the bank, received a five-year sentence in 2019. Moryoussef was sentenced in his absence in 2018 to eight years' imprisonment after fleeing to France, which refused to extradite him on the grounds that the offense was not a crime in France at the time.

Lawyers for the five men submitted that their trials were unfair and their convictions unsafe for reasons parallel to those identified by the Supreme Court in the Hayes case. They also argued for the return of money paid for confiscation orders and prosecution costs, with interest.

Libor, a key benchmark interest rate, was previously used globally for financial deals, including mortgages and car loans. It was calculated based on figures submitted by a panel of major London banks regarding their borrowing costs. Euribor was established with the euro in 1999 as a benchmark interest rate 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 it took over a decade to rectify the wrong in the cases of Merchant and Mathew, and over eight years for Moryoussef, stating their lives had been turned upside down. He called for those involved in the criminal justice system to examine how such errors occurred, were repeated, and 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 have convicted Tom Hayes and Carlo Palombo, and the SFO deemed retrials not in the public interest for those two. He added that after careful consideration, the SFO did not oppose the appeals of the five individuals, having communicated this decision the previous year. Williams affirmed the SFO's commitment to prosecuting serious fraud, bribery, and corruption.

Dame Vera Baird KC, chairwoman of the Criminal Cases Review Commission, which referred the convictions to the appeal court, expressed that it was right for the convictions to be quashed, noting no distinguishing factors between these cases and those of Hayes and Palombo. She concluded that jury misdirection and legal errors undermined the safety of the convictions.