Who is Tom Hayes? Ex-trader wins appeal to overturn rate-rigging conviction at UK top court

In a major legal victory, former UBS and Citigroup trader Tom Hayes, once the central figure of the global LIBOR scandal, has finally had his rate-rigging conviction overturned by the UK Supreme Court.

On Wednesday, the court ruled unanimously in Hayes’ favor, cancelling his 2015 conviction for eight counts of conspiracy to defraud. The charges were related to his alleged manipulation of the London Interbank Offered Rate (LIBOR), a now-retired benchmark used to set interest rates worldwide.

Years of Legal Battle Come to an End

Hayes was originally sentenced to 14 years in prison, though the term was later reduced to 11 years on appeal. He was released on licence after serving five and a half years in 2021. His long legal struggle culminated in a three-day Supreme Court hearing, which he attended with his lawyer Karen Todner.

The same ruling also quashed the conviction of Carlo Palombo, a former Barclays trader, who had been found guilty in 2019 of manipulating LIBOR’s euro equivalent, Euribor. Palombo had been sentenced to four years in prison.

Why the Conviction Was Overturned

Hayes and Palombo both argued that their convictions were based on a flawed interpretation of how LIBOR and Euribor were defined. They claimed the definition wrongly assumed that banks could not consider commercial interest when submitting rates.

The UK Supreme Court agreed with the argument, stating the conviction was built on an incorrect understanding of market practices at the time. LIBOR, phased out in 2023, was determined by daily estimates from banks about how much it would cost them to borrow from one another in different currencies and time periods.

Influence of US Court Decision

This appeal followed a landmark U.S. court ruling in 2022, which overturned similar LIBOR rigging convictions of two former Deutsche Bank traders. That decision was widely seen as a potential game-changer, setting the stage for Hayes’ renewed fight for justice.

What’s Next?

The ruling has sparked intense debate in financial and legal circles, as many question the prosecution of individual traders for conduct that was often industry-wide and poorly regulated at the time.

For Tom Hayes, who has always maintained his innocence, today marks the end of a decade-long battle to clear his name.

“This is not just a victory for me but for truth and fairness,” Hayes reportedly said outside the court.