(Bloomberg) -- The former UBS Group AG and Citigroup Inc. trader who became the face of the Libor manipulation scandal says a U.S. court ruling exonerating two ex-Deutsche Bank AG traders proves he was wrongfully convicted too.
“I have committed no crime,” Tom Hayes said in a statement Friday, a day after a federal appeals court in Manhattan overturned the convictions of Matthew Connolly and Gavin Black for allegedly manipulating the benchmark interest rate. The U.S. Court of Appeals said prosecutors failed to prove Connolly and Black’s actions caused Deutsche Bank to make a false or misleading submission to the panel setting the London interbank offered rate.
Read more: Ex-Deutsche Bank Traders’ Libor Convictions Tossed on Appeal
Hayes, 42, is the highest-profile person to have been convicted in the transatlantic crackdown on Libor manipulation. Accused by the U.K. Serious Fraud Office of being the ringleader of a global network of traders and brokers who rigged the rate, he received an 11-year sentence and served half of it before being released in January 2021.
Since Hayes’s case was brought by British prosecutors, the U.S. court ruling has no legal effect on his 2015 conviction. Last month, the U.K. Criminal Cases Review Commission provisionally rejected his request for a referral to an appeals court, but Hayes hopes the U.S. decision could change their minds. He has until February to file further arguments in response to the commission’s ruling.
‘I Will Not Rest’
“I hope that this U.S. judgment will help them see the errors in my prosecution and refer my case back to the Court of Appeal,” Hayes said. “I will not rest until my wrongful conviction is overturned.”
Though the Libor crackdown attracted a great deal of attention and led to phase-out of the benchmark rate, cases against individual traders have proven difficult to make. While a handful of traders have been convicted and sentenced to prison terms, several others have been cleared of charges.
The U.S. charged a dozen people in its crackdown, six of whom pleaded guilty. Four others who went to trial - including Connolly and Black - were cleared on appeal. Two others have yet to appear in the U.S. to face the charges. Only one of the six to plead received a prison term.
The SFO ended a seven-year rate-rigging investigation in 2019 after securing three guilty verdicts and a guilty plea against bankers at Barclays Plc. But eight others were acquitted in various Libor-related cases, only a handful of other bank employees have faced criminal charges globally. Several of Hayes’s alleged co-conspirators were acquitted.
U.S. prosecutors alleged that Connolly and Black pushed their peers at the bank to alter the rate or submit false data to benefit their trading positions. Deutsche Bank agreed in 2015 to pay $2.5 billion and fire seven traders, including Black, to resolve probes into its role in the scandal. But the two men maintained they were scapegoats for a practice that was common in the industry and encouraged by the bank’s leaders.
In its ruling on Thursday, the U.S. appeals court noted that prosecutors accused Connolly and Black of violating British Banking Association rules by communicating with colleagues preparing Deutsche Bank’s Libor submission. But though the BBA prohibits collusion between banks, the court found there was no bar on a bank receiving input from its own traders.
Hayes said that finding applies to the case against him as well. Similar to Connolly and Black, he claimed he was “scapegoated” by the SFO “in order to cover up the low balling of Libor which was authorized at the highest levels, including the Bank of England.”
In his previous bid to file an appeal, Hayes also cited the lack of consideration at trial for his Asperger syndrome as well as fresh evidence that wasn’t presented to the jury.
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