The Court of Appeal decision overturning the convictions of the traders convicted of “rigging” the LIBOR rates marks the end of a very long legal journey for those involved. All but one of the 19 traders has now had their convictions quashed, but there are calls for further investigations into how this miscarriage of justice occurred.
LIBOR
The London Interbank Offer Rate (‘LIBOR‘) was the index that used to describe the cost of money in terms of interest rate. It was determined each day at 11am, when a number of panel banks submitted the rate at which they were able to borrow money in the interbank market.
For many years, LIBOR was the benchmark interbank rate in the financial world, affecting a wide range of financial products globally, such as loans, mortgages and car finance, but it was abolished in 2024 following numerous issues, partially due to the criminal cases described here.
Background
The scandal unfolded in 2012 when it was discovered that around the beginning of the 2008 financial crisis, various banks had been misrepresenting their positions during the process of setting the lending rate. This was potentially done to help mask any financial difficulties and also to satisfy government policy to reduce the cost of borrowing at a time of severe financial dislocation.
The arc of the moral universe is long, but it bends towards justice.”
Theodore Parker
In total, 19 traders were prosecuted for manipulation of these rates between 2015 and 2019, with their prison sentences ranging from two to eleven years. At the time of the trials, there was much public antipathy for bankers, who were largely felt to be responsible for the economic meltdown and Global Financial Crisis of 2008, as well as anger that the banks themselves had been largely protected from the consequences by taxpayer funded bailouts. Against this backdrop, the traders were cast as symbols of banker greed by the prosecutors.
In July 2025, two of the convicted traders, Tom Hayes and Carlo Palombo, had their convictions for manipulation of the LIBOR quashed by the UK Supreme Court on the basis that the judge at first instance has misdirected the jury. Previously the US Courts had exonerated those convicted in the US in a case brought by Connolly and Black. European prosecutors never brought any cases to trial.
Supreme Court decision
Tom Hayes and Carlo Palombo successfully argued that they were wrongly prosecuted for what were normal commercial practices within the banking world at the time. Further, the Supreme Court held that the jury had been misdirected in the original trials.
Justice too long delayed, is justice denied.”
William Gladstone, but popularised by Martin Luther King
The judge in the original trial had directed the jury that only a single rate applied at the nominated time and that the submitting banks could not have a commercial interest in the rate declared by the bank. These decisions left the jury with little option but to convict Tom Hayes as he had asked for the rate to be higher or lower to suit his trading position. However, both of these two directions were wrong. There would always have been a valid range of rates from which a submitter could have chosen a rate for that day. In addition, in a dynamic market, there will always be a link between the index and the interests of the banks which set the prices of the underlying entity.
It was on this basis that the Supreme Court agreed that they had not received a fair trial and quashed the convictions. This paved the way for the remaining convicted traders to appeal.
October 2026 appeals
A further five former Barclays traders have now had their convictions quashed by the Court of Appeal. Jay Merchant, Jonathan Mathew, Philippe Moryoussef, Alex Pabon and Colin Bermingham were all similarly convicted of manipulating the interest rates. They have all served various jail terms, apart from Moryoussef, who fled to France which refused to extradite him to the UK to serve his jail time.
To delay justice is injustice.”
William Penn
Later that same week, on 9th October 2026, Christian Bittar, became the latest trader to be exonerated, with his conviction for conspiracy to defraud overturned, after serving 6 years in prison. This is particularly important as he had originally pleaded guilty and the Serious Fraud Office opposed his exoneration.
This outcome of this latest appeal means that Peter Johnson is the only remaining trader who still has a conviction for interest rate ‘rigging’. Peter Johsnon was a trader at Barclays and was one of the original whistleblowers to the scandal. However, both he and Christian Bittar pleaded guilty to the charges on the advice that they had very little chance of winning at trial. Despite pleading guilty, it was considered that given the legal errors identified by the Supreme Court in the cases of Tom Hayes and Carlo Palombo, the guilty plea by Bittar did not amount to an admission of all the elements of the offence and therefore could be appealed. Peter Johnson is now planning to appeal.
Conclusion
Undeniably this is a momentous outcome for the traders whose lives and careers were irreparably damaged and who have finally cleared their names. Following the Court’s decision, the traders they spoke of the “burden” of the ordeal and being able to finally enjoy life “without this shadow hanging over us”. There was also an understandable desire to see that “those responsible… are held fully accountable.”
Regulators have made many of the major banks make settlements of substantial sums to resolve the situation. The largest was Deutsche Bank which paid some US$3.5bn to the Financial Conduct Authority in the UK and the Department of Justice in the US amongst others.
Whilst regulator involvement has led to large fines paid by the major banks in relation to this scandal, there are mounting calls for further recompense to the traders whose lives were so affected by the wrongful decisions of the earlier trials. Since last week’s decision, a number of lawyers and politicians have spoken out, demanding that the Bank of England and the Treasury release all of their records relating to their roles in the interest rates during this time. Whether there was a much larger, state-mandated “rigging” scandal is still to be uncovered, as written about in Andy Verity’s book Rigged. But with Tom Hayes seeking $400 million compensation from UBS, his former employer, and others, who have now been exonerated, asking for compensation from their previous employers, this is unlikely to be the end of this saga. In the fullest sense of the the word, it seems clear that justice has not yet been done.
Dr Thomas Walford of Expert Evidence International Limited has been involved with the Tom Hayes’ cases and submitted a report to the defence team and the CCRC.
Link: Pabon & Ors, R. v [2026] EWCA Crim 1345 (07 October 2026)
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