Court of Appeal quashes fraud convictions of five former Barclays traders

The Court of Appeal has overturned the fraud convictions of five former investment bankers who were previously found guilty of manipulating the Libor and Euribor interest rates. The decision marks a significant development in the ongoing legal fallout from the 2008 financial crisis, as the convictions of Jay Merchant, Jonathan Mathew, Philippe Moryoussef, Alex Pabon and Colin Bermingham were formally quashed on Wednesday. All five men had previously worked at Barclays and served prison sentences for conspiring to rig the now-defunct benchmark rates. This ruling follows a landmark Supreme Court decision last year that overturned similar convictions for former traders Tom Hayes and Carlo Palombo, effectively unravelling some of the Serious Fraud Office’s most prominent prosecutions.

The Criminal Cases Review Commission referred these cases to the court in January after the Serious Fraud Office announced it would not seek retrials against Hayes and Palombo. Lord Justice Edis confirmed the quashing of the convictions for the five former Barclays traders, noting that full reasons for the decision would be provided in due course. The move places the case of Christian Bittar, a former Deutsche Bank trader, in a distinct position. Bittar’s appeal has yet to be considered by the Court of Appeal, and he continues to argue that his conviction should also be overturned, despite the prosecution’s contention that it remains safe.

In a statement issued following the ruling, Jonathan Mathew described the quashing of his conviction as a matter of correcting the record and validating that an injustice had occurred. Tom Hayes, who served half of an 11-year prison sentence between 2015 and 2021 after receiving the longest prison sentence of any white-collar criminal in British legal history, welcomed the decision. Hayes stated that the day was a fantastic one for those exonerated, while expressing sadness that the United Kingdom remains a global outlier in characterising standard industry practice as criminal. Alex Pabon, now 48, thanked his legal team, family and Hayes for persisting with the case, adding that the Serious Fraud Office now accepts his conviction is unsafe and that Barclays played a large role in building the case against them.

Legal experts have commented on the broader implications of the ruling. Tom Bushnell, a partner at Hickman & Rose, noted that the decision recognises that errors in the initial trials were repeated in other Libor and Euribor prosecutions. He suggested that the Serious Fraud Office must reflect on how its failure to ensure fair trials contributed to the collapse of its most significant series of prosecutions in the past fifteen years. In response, Jason Williams, head of division at the Serious Fraud Office, stated that the Supreme Court had found ample evidence for a properly directed jury to have convicted Hayes and Palombo. However, the agency deemed it not in the public interest to seek retrials for those two individuals. After carefully considering the judgment and the full circumstances, the Serious Fraud Office confirmed it does not oppose the appeals of the five individuals convicted in relation to Libor and Euribor, a decision it communicated to the affected parties last year.