Former UBS and Citigroup trader Hayes (45) was convicted of conspiring to rig the London Interbank Offered Rate (Libor), while Palombo (44), a former trader at Barclays, was convicted of rigging the Euro Interbank Offered Rate (Euribor).
The men sought to overturn their criminal convictions, which went to the Court of Appeal earlier this year after being referred by the Criminal Case Review Commission. However, last month, the Court of Appeal dismissed both of their appeals.
One reason the three appeal judges dismissed the men’s cases was that the court concluded that the Libor and Euribor definitions required the banks responsible for setting daily rates of borrowing to assess the rate at which they “could borrow” and that this “must mean the cheapest rate.”
The three judges also said the rate at which a bank would have to borrow is the lowest rate at which it could borrow.
However, a documents shared to The Times suggested the British Banking Association (BBA) had considered adding the word “lowest” to its definition of Libor amid the global scrutiny in 2008, but decided against it after consulting big lenders, central banks and regulators.
The BBA is a trade association representing the interests of the banking industry operating in London, and at the time, was in charge of operating the libor. BBA is merged into UK Finance in 2017.
On the document, Hayes pointed out that “the title of the document is clear the construction and operation of Libor was not limited to the lowest rate.”
“The UK court declared that to suggest anything other than the lowest rate could be submitted was absurd. In so doing they created law decades after the event, using an interpretation of the Libor definition that is now demonstrably not what the governing body of the rate intended or meant,” he added
This is not the only issue to come out since the court’s decision in March, earlier this month, Hayes’ lawyer wrote to the Court of Appeal over allegations that one of the judges on the appeal case had a potential conflict of interest.
Lawyer Karen Todner wrote to the court over Mr Justice Bryan’s position on the appeal panel after she discovered he sat one of the previous Euribor interlocutory appeals for Christian Bittar.
In the meantime, Hayes and Palombo are currently seeking permission from the Court of Appeal to take their case to the UK’s Supreme Court. Their deadline is Tuesday, 23 April, with a decision expected shortly afterwards.
Speaking out after the court’s ruling last month, David Davis MP said the decision made London an “outlier” compared to other financial capitals. He said “it is vital that the judges allow it to go to the Supreme Court“.