Tom Hayes & Carlo Palombo: The 28-year-old traders who lost everything

Tom Hayes and Carlo Palombo have come out the end of a long, long tunnel. In their late 20s' both were earning millions of pounds as traders at UBS and Barclays respectively. Both were subsequently imprisoned for manipulating LIBOR and EURIBOR. Today, in their mid-40s, both had their criminal convictions overturned.

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Hayes served five and a half years in prison for white collar fraud. He was imprisoned at some of the UK's harshest institutions, including Belmarsh and Wandsworth. “It’s a quick way to bring you back down to earth,” he told us nearly three years ago. “You’re in a three-man cell in Belmarsh and are forced to defecate in front of two other human beings, one of whom is in there for attacking someone with a machine gun.” 

Palombo was sentenced to four years in prison, although it's not clear where. 

Both men lost a lot.

Before his conviction, Palombo was a vice president (VP) at Barclays in London. He joined Barclays as a trainee in 2002 and became a senior trader with responsibility for submitting EURIBOR In 2008, aged 28, he was paid £200k. At his first court hearing, he attempted to argue that this was despite being junior and that in banking terms, being a VP was "like [being] the guy who serves you at McDonald's". When Barclays fired him in 2012, Palombo initially moved to the US and began studying a doctorate in philosophy at UC Riverside. When he was eventually convicted in 2019, his wife was pregnant. Palombo returned to the UK to serve his sentence, and so missed the birth of his daughter and the first two years of her life. He's now in his 40s; it's not clear whether his marriage survived the stress. The doctorate was dropped.

Hayes lost his marriage and his health. Like Palombo, he worked his way up from the graduate programme. Before his UBS internship, Hayes was paid £2.70 an hour working long hours in a kitchen. However, Hayes made $260m in profits for UBS over a three-year period and left for Citi. Aged 28, he was being pursued by Goldman Sachs, which offered him a $3m guaranteed bonus. He had five Mercedes, a wife, a child, and a 7-bedroom house in Woldingham, Surrey, which then was raided by the police. “I went from being very, very wealthy to having nothing,” he told us. 

Hayes separated from his wife after four years in prison, and they divorced a year after he came out. He told Financial News three years ago that his son was in therapy to process only seeing his father in prison from the age of three. When he was released from prison, Hayes was diagnosed with multiple sclerosis, which he attributed to the stress. 

In the Supreme Court judgement, released today, Lord Reed and others said previous judges had misdirected the jury. The jury were wrongly instructed that if Hayes, as a LIBOR submitter, took the commercial interests of the bank into account, the rate he set was by definition legally dishonest. This was incorrect. In Palombo's case, a similar error was made. Both convictions were deemed "unsafe" as a result. 

If the two men receive compensation, it will come later. The Serious Fraud Office seized £2m of assets from Hayes in 2016. Palombo was ordered to pay nearly £1m in fines. 

When we spoke to him in 2022, Hayes said no amount of compensation would ever make up for what he'd lost. "If you offered me $20m ten years ago and said that it would cost me my marriage, my health, and my son's wellbeing, I would say 'no way.' There is no amount of money to compensate for that."

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