In a historic ruling handed down on 9 October 2026, the Court of Appeal of England and Wales formally quashed six convictions connected to the alleged manipulation of LIBOR and EURIBOR interest rate benchmarks. The decision represents the definitive legal conclusion to more than a decade of complex white-collar litigation prosecuted by the Serious Fraud Office (SFO).
The Supreme Court precedent and flawed statutory interpretation
The Court of Appeal’s ruling follows the seminal Supreme Court jurisprudence establishing that the original criminal trials proceeded on a misinterpretation of benchmark setting rules:
- Absence of Legal Prohibition: The submitting banks were not prohibited by British or international regulatory definitions from taking their own commercial interests into account when estimating rates within an allowable range.
- Evidentiary Thresholds in Commercial Crime: Criminal dishonesty requires proof that an individual knowingly acted contrary to clear and unambiguous legal duties, rather than ambiguous trade customs or retrospective regulatory interpretations.
- The Limits of Prosecutorial Overreach: The Court of Appeal emphasized that prosecutors cannot convert contractual ambiguities or industry practice disputes into criminal conspiracy without strict statutory backing.
Systemic implications for corporate compliance and financial regulation
The judgment has immediate consequences across the City of London and international corporate governance:
- Heightened Burden of Proof: Regulatory enforcement bodies, including the Financial Conduct Authority (FCA) and the Serious Fraud Office, face substantially higher evidentiary barriers before bringing criminal charges in complex markets.
- Review of Historical Sanctions: Financial institutions and individual traders previously subjected to disqualification orders or regulatory fines are evaluating grounds for formal review and redress.
- Clear Guidance Imperative: Regulators must draft unequivocal, legally binding rules rather than relying on informal market expectations or discretionary guidance to police algorithmic and financial operations.