Former UBS and Citigroup banker Tom Hayes, who was jailed for rigging Libor interest rates, has had his conviction overturned by the Supreme Court.  

A panel of five justices ruled that his conviction was unsafe, which saw Hayes and 18 other bankers at the centre of public anger in the aftermath of the global financial crisis. 

The bankers were convicted of working on a committee that manipulated Libor – the London Interbank Offered Rate – interest rates, which priced more than $350tn of loans and securities for lenders around the world, to benefit their own group of banks. 

The move saw Libor scrapped as regulators moved to the Sonia — Sterling Overnight Index Average – benchmark set by a larger array of banks, which is used to set swap prices, and which in turn shapes mortgage rates.   

The Supreme Court quashed the conviction of Hayes, calling his original 2015 trial at Southwark Crown Court unfair. 

The Court ruled: “Mr. Hayes was entitled to have his defence to the allegation that he agreed to procure false submissions as well as his denial that he had acted dishonestly left fairly to the jury. 

“He was deprived of that opportunity by directions which were legally inaccurate and unfair.” 

Hayes was originally handed a 14-year prison sentence and served five-and-a-half years in prison after his sentence was reduced to 11 years on appeal. He was released in 2021. 

Former Barclays trader Carlo Palombo, who received a four-year sentence for manipulating Euribor, another benchmark rate, also had his conviction overturned. Palombo was also released in 2021. 

The Serious Fraud Office, which prosecuted Hayes and Palombo and seven other bankers in the UK, said it would not seek a retrial. 

The Serious Fraud Office added: “Our investigation led to nine convictions of senior bankers for fraud offences, with two of these individuals pleading guilty and seven found guilty by juries.  

“This judgment has determined that the legal directions given to the jury at the conclusion of the trial were incorrect in Hayes’ and Palombo’s trials and for that reason their convictions have today been found unsafe. 

“We have considered this judgment and the full circumstances carefully and determined it would not be in the public interest for us to seek a retrial.” 

In total, UK and US prosecutors held nine criminal trials in London and New York between 2015 and 2019, which secured 19 convictions. 

Outside court, Hayes said: “It feels very surreal, a little bit like my conviction, like it’s not really happening to me.  

“And I’m just very grateful to all the justices who heard the appeal.” 

He added: “We had nothing to do with the financial crisis, like zero.” 

Lawyers said that other convictions may be set aside following this ruling. 

Charles Russell Speechlys partner Caroline Greenwell said: “This is a landmark ruling, by which the Supreme Court has made it clear that considering commercial interests when submitting Libor rates isn’t automatically dishonest or criminal. 

“The judgment brings the UK in line with the US courts, who in 2022 overturned convictions of traders on the basis that banks were permitted to factor in trading advantages when making Libor submissions, and confirms that the juries in Mr Hayes’ and Mr Palombo’s trials were unfairly directed by the judge that considering commercial interests in the submissions were prohibited. 

Greenwell added: “This result not only clears Mr Hayes’ and Mr Palombo’s names, but could also lead to convictions secured in nine other criminal trials prosecuted by the Serious Fraud Office — who naturally opposed Hayes’ and Palombo’s appeals to the Supreme Court — being reviewed.”