A Financial Conduct Authority (FCA) ban on former UBS and Citigroup trader Tom Hayes will not be enforced while his conviction for Libor rigging is reviewed, the Royal Courts of Justice has ruled.
Stephenson Harwood was appointed to defend Hayes in this action in March, following a number of changes in counsel.
Stephenson Harwood’s Sara George, who is defending Hayes, said: “The FCA sought to ban Hayes from regulated activity, and issued a prohibition order against him, despite the Criminal Cases Review Commission investigating his conviction. This is the first time that an application for a stay in FCA prohibition proceedings, where an individual has been sentenced for a criminal offence, has been successful.”
The former UBS and Citigroup trader was the first individual to face trial for manipulating the rate and was found guilty of rigging global Libor interest rates in August 2015, in what marked a victory for the Serious Fraud Office (SFO) in its stance against the banks.
The former trader asked the High Court to stay enforcement action by the FCA, which sought to ban him from working in the financial sector, pending the outcome of a separate investigation by the body that reviews suspected miscarriages of justice.
Hayes referred his case to the Criminal Cases Review Commission in January, alleging there were flaws in expert evidence that led to his conviction. The CCRC could refer his case to the Court of Appeal if it so chooses.
The FCA said in a statement: “The Financial Conduct Authority (FCA) has decided to prohibit Tom Hayes from performing any function in relation to any regulated activity in the financial services industry. The FCA considers that Mr Hayes is not a fit and proper person as a result of his conviction for conspiracy to defraud in relation to the manipulation of Yen Libor.
“Mr Hayes has referred the FCA’s decision to the Upper Tribunal. Therefore, the decision has not taken effect pending the determination by the Tribunal.
“Following the referral, the FCA applied to have Mr Hayes’ reference struck out, and Mr Hayes applied to prevent publication of the FCA’s Decision Notice and to delay the hearing of the proceedings on the basis that he has referred his conviction to the Criminal Cases Review Commission (CCRC).
“The Tribunal has decided to delay the proceedings pending the CCRC’s decision.”
Hayes added: “I welcome this decision. I can now concentration fully on the Criminal Cases Review Commission’s investigation into my conviction, and support it in any way I can. I’m pleased that the FCA has accepted my CCRC application is substantive and expects it to be considered seriously. I continue to maintain my innocence. There is a huge amount of new evidence available and I will fight my conviction until the truth comes out.”
In January, Hayes instructed Kaim Todner partner Karen Todner to appeal his conviction. He had also previously sought legal advice from Garstangs Burrows Bussin before it merged with Cartwright King. Hayes also used Fulcrum Chambers and 25 Bedford Row, as well as Charter Chambers in the jury trial.
In May last year, The Lawyer reported that UBS put pressure on Stephenson Harwood to not represent another Libor trader client, Arif Hussein, in relation to an FCA investigation. A senior lawyer at the banking giant reportedly phoned the firm to ask it to cease representing Hussein, who was embroiled in a similar Libor-manipulation scandal and was also represented by Sara George.
The bank is a longstanding client of Stephenson Harwood and often refers senior management individuals to the firm for representation. The firm was instructed Hussein in 2013 in relation to the FCA probe, which concluded in April 2016 with the blacklisting of “reckless” Hussein from financial services work.