A US appeals court last night overturned the conviction of two former Deutsche Bank traders, one from Twickenham, who were prosecuted for rigging interest rates. A three-judge panel in New York ruled that “the government failed to show that any of the trader-influenced submissions were false, fraudulent, or misleading” in the case of Matthew Connolly and Gavin Black, who both worked for the German bank. Connolly told the Standard he was “thankful a court has finally acknowledged the truth of how Libor was built.”
Tom Hayes, a former UBS and Citigroup trader who was jailed on similar charges, today said the decision gave him new hope in his fight to have his conviction overturned.
“For the first time we’ve had an independent minded court look at the facts and say: well actually, there wasn’t any misrepresentation,” Hayes told the Standard.
“I’m ecstatic with the fact that a court has finally recognised that there was no falsity in the rates that any and all traders mixed up in this thing submitted.”
In 2015 Hayes was sentenced for 14 years in prison, later reduced to 11, for manipulating Libor submissions while working in the City between 2006 and 2010. Libor is an interest rate measure used to price products worth trillions around the world. It is set each day by asking banks the interest rate they would charge to lend to one another.
Prosecutors argued Hayes conspired with other traders to manipulate the rate for profit. He claims what he did was not against the rules, the practise was widespread in the City and he has been made a scapegoat.
“We were convicted on the basis of the fact that we deliberately disregarded a rule that didn’t exist at the time,” he said today. “The US courts have just made a ruling that no such rule or instruction actually existed that you couldn’t consider your commercial interests. In fact, that was in line with my bank’s company policy and industry practice.”
Hayes served five and a half years in prison before being released a year ago tomorrow. He is still serving the remainder of his sentence “on licence.”
He said: “I’m not free by any stretch of the imagination.
“Up until recently, I couldn’t go and stay at any other address without getting authorisation from the probation office. At times I was denied permission to actually stay with my mother. I can’t travel abroad, I have to report in person to the probation office.”
Hayes and his legal team have been fighting to have his conviction overturned. An attempt to get the case referred to the Court of Appeal was provisionally rejected by the Criminal Cases Review Commission in December. He is challenging that judgement, with submissions due next month. Hayes’ lawyer Karen Todner said they would include the US Deutsche Bank decision in their arguments, calling it “a significant development.”
Hayes said: “We made the same arguments that have now been made and been successful in the United States.
“We have tried multiple times to take this point of law up to the Supreme Court and we have been blocked on each and every occasion. This ruling now places the United States alongside France, Germany and Switzerland and Japan and Canada and a host of other countries who don’t recognise the behaviour as criminal because, frankly, false rates weren’t submitted.”
24 traders have been prosecuted for Libor rigging, according to the BBC, nine of whom were jailed between 2014 and 2019.
Connolly said: “My exoneration means people, such as Tom Hayes, were prosecuted on lies. Any prosecution that did not recognize the fact that Libor submitters were allowed leeway in their submissions needs to be overturned. [There have been] too many miscarriages of justice in this arena.”
Hayes said: “I haven’t given up, I’ve not given up fighting for my justice and for the justice of everybody who was jailed in this country. None of us should have faced a trial.
”This country put me in prison for five and a half years for something that not even wasn’t a crime, it wasn’t against the rules.
“I lost my marriage, I missed my son growing up, I’ve had every asset I’ve ever owned taken from me either by legal fees or by confiscation. Look what they did to me.”
He now works for a corporate intelligence company but says his legal battle takes up much of his time.
“For me this rumbles on. It’s already been going on for 10 years now, I was arrested in 2012.”