City traders jailed for rigging Libor line up legal bid to clear their names

Four City traders jailed for fixing a key interest rate are preparing a fresh legal challenge.

It follows news that another trader, Tom Hayes, had won the right to appeal his conviction in the UK for rigging the Libor rate that was used by major banks to price short-term loans to each other.

Hayes, 43, was the first Briton to be jailed for Libor fixing.

He was given the green light to take his case to the Court of Appeal last week by the Criminal Cases Review Commission (CCRC).

That ruling has encouraged four other traders into a separate legal campaign to clear their names – and one of them is also joining Hayes’ challenge in the Court of Appeal. The Mail on Sunday understands that up to five others could join the group action.

Legal wrangling around Libor has been ongoing ever since the scandal emerged a decade ago, sending shockwaves around global markets and sparking billions of pounds in fines for banks.

The Serious Fraud Office (SFO) accused Hayes of being the ‘ringmaster’ behind a so-called international conspiracy, although he was not alone in spending years behind bars.

Former Barclays trader Carlo Palombo, who was handed a four-year sentence for Libor rigging, plans to join Hayes in the Court of Appeal. He said he will not rest until he gets justice.

‘I don’t feel free,’ he told the MoS, ‘My life is not the same on so many levels and psychologically it’s really hard. I can’t sleep at night.’ Palombo was jailed in 2019 – during which time he missed the birth of his daughter – and released two years later. Before his time in prison and after leaving Barclays, he moved to California to complete a PhD in philosophy. He has since had to leave the US.

‘Our home is still in California and I am not allowed to go there ever again because of my criminal conviction,’ he said.

‘I feel a lot of anger. I refuse to have this matter closed but the result is constant anger.’

City lawyer Ben Rose is acting for the convicted Libor traders in their legal battle. He claims their prison sentences were ‘legally flawed and procedurally unfair’.

Jay Merchant is another jailed trader who is part of the group action. He said: ‘I am going to fight this till I die. We will keep plugging away.’

Hayes told the Daily Mail he burst into tears when he found out his case had been referred back to the Court of Appeal – six-and-a-half years after he first applied to the body.

‘It has been a long and hard battle for me,’ he said.

‘I am just so thankful to everyone who has stuck by me.’

His 14-year sentence was reduced to 11 years on appeal. He served five-and-a-half.

A spokesman for the SFO said: ‘All our prosecutions are based on evidence and the applicable law. We stand ready to support the Court of Appeal as it considers this referral.’