On the night of July 5-6, Tom Hayes had a nightmare, in which he was sent back to prison. After spending five and a half years behind bars in the United Kingdom, two and a half years after his release, the former trader, who claims his innocence, remains deeply traumatized. But the next day, he learned the news he had been waiting for so long: his trial will be reopened and will be held before the British Court of Appeal, probably in early 2024.

While the Briton had come to the end of all legal remedies, the British Commission for the Review of Criminal Trials (Criminal Cases Review Commission, CCRC) ruled in his favor. A rare decision, which can only be taken if new evidence or new elements can modify the initial judgment.

CCRC Chair Helen Pitcher believes the “right legal approach” may not have been taken in the first trial, and she promises to “move heaven and earth in [the] fight against possible miscarriages of justice.”

Judicial error… The word is out. Pierced blue eyes, restrained emotion, but on edge, Mr. Hayes, sentenced at first instance in 2015 to fourteen years in prison (reduced to eleven years on appeal) – more than some murderers – has been fighting to clear his name since his initial arrest in December 2012. “We were sentenced for something that was simply not illegal”, he insists today. He speaks in the plural because he is the figurehead of a group of nine traders – including himself – sentenced to a total of forty-nine years and seven months in prison, all of whom hope to see their convictions overturned in the wake of Mr. Hayes.

Obscure interest rates

In the years following the 2008 financial crisis, these highly paid former bankers, including two Frenchmen, made perfect culprits. They found themselves at the center of what was presented by regulators and financial prosecutors in several countries as a huge scandal. According to the prosecution, they had manipulated obscure interest rates, called “Libor” and “Euribor”, which serve as benchmarks for hundreds of billions of euros in financial products.

Eight of them actually went to prison, and the last one became a fugitive, a refugee in France. But today, the prosecution case is falling apart. “Tom [Hayes] and the other traders were used as scapegoats, accuses, on the BBC, the British Conservative MP David Davis. At the time, there was a kind of witch hunt: everyone was very angry with the bankers, for good reasons (…), people wanted punishments: I fear that the British courts gave in to this pressure. »

Back to 2005-2009, the period corresponding to the facts judged. Mr. Hayes was then a trader in Japan for the Swiss bank UBS. Carlo Palombo, a Milanese recently arrived in London, is an apprentice trader at Barclays, London. Philippe Moryoussef, a Frenchman, is his direct boss, very proud to have landed a job at the City. All of them have one thing in common: they work on Libor or Euribor, which are the interest rates at which banks lend money to each other.

Every day, to manage their liquidity, banking institutions borrow from each other for short periods, between a day and a year, in different currencies. To find your way around, a reference rate is calculated daily. At 11 a.m. every day, sixteen banks (for Libor) and forty (for Euribor) announce the rates they charge that day. A weighted average is then calculated.

Except that an interest rate is not an exact science. It is constantly evolving. “It’s like appraising a house: if you ask three experts, they will give you three slightly different prices,” explains Philippe Moryoussef. That doesn’t mean either of them is lying. »

“Normal trade practices”

Within this leeway, traders, who buy and sell financial products linked to Libor or Euribor, seek to push their advantage. Every day they ask the person at their bank submitting the Libor or Euribor rate – usually someone on the same trading floor as them – to go a little higher or a little lower, depending on their trading interest. They absolutely do not hide their action. Everything is done by e-mail, which made it possible to accurately trace exchanges, such as this, between two Barclays bankers:

“If it’s not too late, [a] low rate on [the] one-month and three-month [loans] would be nice, but feel free to say no.” I’m sending you coffees anyway, just to thank you for your help over the past few weeks.

– It’s done. Just for you, big guy.

– Hey, thank you. »

Gradually, the understanding widened. In Japan, Tom Hayes is also asking brokerage houses to lend him a hand. In London, traders from several banks coordinate. The middle is macho and likes to be lathered. One promises to “open a bottle of Bollinger” for another who has agreed to lower his rate by 0.005 points, while a third promises to “keep it a secret (…) otherwise it won’t work”.

No one disputes the facts. But was it illegal? During the trials, the traders all repeated the same thing: “It was just normal practice in this trade”, Carlo Palombo said today. Between 2005 and 2007, he was still only an apprentice, at the very bottom of the hierarchical ladder. He was sentenced to four years in prison based on twelve emails, some of which were copied to his entire team. “I was a simple apprentice, I was asked to send a message, I did. »

Extradition rejected by France

Above all, the bankers only changed their rate marginally, by 0.01 or 0.02 points, within a range actually practiced that day. This is the conclusion reached by an appeals court in Manhattan, United States, in January 2022, finding that the prosecution “had not demonstrated that the rates influenced by traders were false, fraudulent or misleading”.

The founders of Euribor themselves claim that taking into account the commercial interest of traders was allowed, as long as the interest rates submitted were realistic. Finally, there was never any bribery or corruption: the bottle of Bollinger mentioned in a message was never offered.

So many reasons why a decade ago traders approached their lawsuit in disbelief, but relatively relaxed. But, in 2015, thunderclap: in the United Kingdom, the judge of Tom Hayes, Jeremy Cooke, takes a fundamental decision, which will set a precedent. “He decided on a retroactive law, which prohibited the taking of commercial interest in the submission of the interest rate,” explains Mr. Moryoussef. Never mind that this was the practice of the whole market: suddenly, the action of the traders had become illegal.

The other Frenchman involved in this affair, apart from Philippe Moryoussef, is called Christian Bittar and worked for Deutsche Bank. The first time Le Monde met them, in 2016 during the preliminary hearings, they still couldn’t believe they found themselves in the dock. Faced with this turn of events, they have chosen two diametrically opposed positions. Philippe Moryoussef refused to go to trial, remaining in France. He took it well, the French justice having rejected his extradition. Under an international arrest warrant, however, he cannot leave the country. As for Christian Bittar, he conversely decided to plead guilty: a way to reduce his sentence by a third, and to get it over with as quickly as possible. He spent almost two years in prison, before being released just before the Covid-19 pandemic, in February 2020.

Now, they are both beginning to believe in a possible judicial reversal. “I feel the wind finally turning, wants to believe Philippe Moryoussef. The truth must come out. »

Initially, the case against the former bankers cracked in small steps. In France, the refusal to extradite Mr. Moryoussef was justified because the charge against him was not a criminal act, according to French justice. German, Canadian, Swiss and Japanese courts have come to similar conclusions. But the real turning point was the decision of the American Court of Appeal, in 2022. Now, only the United Kingdom remains to have condemned bankers in this case.

“This condemnation continues to destroy my life”

“We find ourselves in a perverse situation where people who worked in the United States faced trials in the United Kingdom and went to prison for acts that are not crimes in the United States, explains Tom Hayes. How can there be such a legal dichotomy between the UK and the rest of the world? »

In his modest north London home, Carlo Palombo experienced the CCRC’s decision to reopen the trial of Tom Hayes with “tremendous relief”. The Italian, who is currently completing a thesis in philosophy, was himself sentenced to four years in prison for “manipulating” Euribor. He spent two years behind bars and experienced the birth of his daughter hanging on the phone, listening to his wife’s delivery from his cell. The day after the court ruling on Mr. Hayes, he filed his own case with the CCRC.

Their hope is that their two cases will be tried together in the UK Court of Appeal. If they win, the case law should apply to all, and all nine convictions should then be overturned. “I am no longer in prison, but this sentence continues to destroy my life, explains Carlo Palombo. There is the trauma of having suffered immense injustice, but also of not being able to really talk about it. In the eyes of society, I remain a criminal. Many people around me continue to tell themselves that there is no smoke without fire. Clearing my name is my top priority. »