Why it matters: On January 27, 2016, five former brokers were acquitted by a U.K. jury of conspiracy to defraud by manipulating LIBOR, and a sixth was acquitted the next day. The trial, which commenced in October 2015 in Southwark Crown Court in London, resulted from charges brought by the U.K.'s Serious Fraud Office that the six individuals had conspired with convicted LIBOR manipulator Tom Hayes to engineer Yen LIBOR rates to favor Hayes' trading positions. The jury's acquittal across the board was a blow to the Serious Fraud Office.

Detailed discussion: On January 27, 2016, after a four-month trial, a U.K. jury took one day to acquit five former brokers that the Serious Fraud Office (SFO—the U.K.'s version of the DOJ's white collar sections) claimed had conspired with convicted LIBOR manipulator Tom Hayes (Hayes) to illegally manipulate Yen LIBOR rates. The next day, the jury acquitted the sixth defendant in the case. The acquittal was a blow to the SFO, which in August 2015 had successfully prosecuted former UBS and Citigroup trader Hayes as the "ringmaster" of an elaborate LIBOR manipulation scheme conducted between 2006 and 2010; Hayes was found guilty of LIBOR manipulation after a jury trial and is currently serving an 11-year (reduced from 14-year) prison term.

According to The Wall Street Journal's press coverage of the four-month trial, the SFO argued to the jury that the six former brokers (with "colorful" nicknames such as "Lord Libor," "Big Nose," and "Danny the Animal") acted at the direction of and in concert with Hayes to illegally manipulate the Yen LIBOR rates to favor Hayes' positions and were rewarded with monetary kickbacks, meals, bottles of expensive champagne and other tangibles for their efforts. In turn, the defense argued that the low-level broker defendants didn't have the power to influence the Yen LIBOR rates and were simply conning the gullible Hayes, who was not the diabolical "criminal mastermind" portrayed by the SFO. The jury apparently agreed, voting to acquit all six defendants.

The Wall Street Journal reported that the acquittals were a "setback" for the SFO because David Green, the SFO's director, had made the LIBOR manipulation investigation his priority and was hoping that convictions in this trial would "pave the way" to convictions in upcoming related manipulation conspiracy trials and "improve the agency's international credibility." Moreover, "the acquittal of the brokers undermines a key plank of the government's conspiracy case against [Hayes], namely eight counts of conspiring to defraud with brokers and fellow traders." In the face of the acquittal, Director Green found himself on the defensive, stating that "[t]he key issue in this trial was whether these defendants were party to a dishonest agreement with Tom Hayes…. By their verdicts the jury have said that they could not be sure that this was the case. Nobody could sensibly suggest that these charges should not have been brought and considered by a jury." Representatives for Hayes released a statement that Hayes was "thrilled that the brokers can tonight return to their families and their lives" but was also "bewildered that he is now in a situation where he has been convicted of conspiring with nobody."

See here to read the 1/28/16 USA Today article entitled "London jury acquits ex-brokers of Libor-rigging."