Tag Archives: appeals

U.S. appeals court overturns SEC commissioners in State Street case

The 1st U.S. Circuit Court of Appeals in Boston stated the commission’s findings against John Flannery and James Hopkins, respectively State Street’s former chief investment officer and former head of North American solution engineering, had been “not supported by substantial evidence.”

The choice is a defeat for SEC Chair Mary Jo White, who last December joined a 3-2 majority in holding Flannery and Hopkins civilly liable.

Flannery and Hopkins were accused in 2010 of possessing marketed State Street’s Restricted Duration bond fund three years earlier as protected, even although the fund had grow to be invested practically totally in risky securities.

The fund, which as soon as had $ 1.4 billion of assets, lost about 37 percent of its worth more than three weeks in August 2007, the SEC stated.

Each defendants scored a rare win in 2011 when SEC Chief Administrative Law Judge Brenda Murray dismissed the case.

But SEC enforcement employees appealed, and won a reversal from the complete commission 3 years later.

Hopkins was fined $ 65,000 and Flannery $ 6,500, and each had been suspended from the investment sector for a year.

In Tuesday’s selection, Circuit Judge Sandra Lynch mentioned an Aug. two, 2007 letter to investors about the fund’s approach, a draft of which Flannery had noticed, was not misleading, and for that reason Flannery could not be held liable for it.

She stated the SEC did not show that Hopkins’ conduct was at least reckless, including for failing to update a presentation slide that showed the fund had decreased its credit risk.

The appeals court did not evaluation an Aug. 14, 2007 investor letter from Flannery himself about market place volatility.

But even if that letter have been misleading, “there is not substantial proof to help the Commission’s obtaining that Flannery engaged in a fraudulent ‘practice’ or ‘course of business,'” Lynch wrote.

SEC spokespeople did not right away respond to requests for comment.

“It is a comprehensive repudiation of the SEC’s factual findings,” Mark Pearlstein, a McDermott Will & Emery companion representing Flannery, mentioned in an interview. “At lengthy last, my client has been exonerated.” Flannery is no longer in the securities sector, he said.

John Sylvia, a lawyer for Hopkins, was not right away accessible for comment.

The circumstances are Flannery v SEC, 1st U.S. Circuit Court of Appeals, No. 15-1080 and Hopkins v SEC in the exact same court, No. 15-1117.

(Reporting by Jonathan Stempel in New York Editing by David Gregorio)

Jailed Libor trader Tom Hayes appeals 14-year sentence, conviction

* Two day Court of Appeal hearing begins Tuesday

* Hayes to appeal conviction and 14-year term

* Sentence shows tougher stance on white collar crime

By Kirstin Ridley

LONDON, Nov 30 Tom Hayes, the very first trader convicted by a jury of manipulating Libor benchmark interest prices, on Tuesday begins a two-day, appeal against his conviction and a 14-year jail sentence, a single of the toughest to date for white collar crime.

The London case is being heard by Lord Chief Justice John Thomas — the head of the judiciary in England and Wales — Brian Leveson, a senior judge who chaired a public inquiry into the ethics of the British media in 2012, and Elizabeth Gloster.

Hayes, a 36-year-old former UBS and Citigroup trader, was in August identified unanimously guilty of eight charges of conspiracy to defraud for rigging Libor, the London interbank provided price, that underpins about $ 450 trillion of monetary contracts and consumer loans worldwide.

Cast as the ringleader in a single of the rate-rigging scams that has cost banks billions in regulatory fines, Hayes was found guilty of conspiring to rig Libor for profit.

But his legal group is arguing that Higher Court Judge Jeremy Cooke produced legal errors in the way he handled the trial and that the sentence is wrong in principle and excessive.

Much of the initial argument is anticipated to focus on what evidence was deemed relevant or admissible during the trial, lawyers say. The arguments about sentence length are probably to rest in component on regardless of whether Cooke was correct to jail Hayes for consecutive, rather than concurrent, fraud offences.

Richard Cornthwaite, Hayes’s lawyer at law firm Cartwright King, stated he anticipated a ruling this week but added that this was “a matter for the court” .


Hayes, who has Asperger’s Syndrome, denied dishonesty throughout his trial, arguing he had been open about practices that had been endorsed by senior employees and common in the business at the time.

Hayes’s defence was hampered by his earlier admissions of dishonesty in interviews with investigators in 2013. Hayes told the jury he initially cooperated with the Severe Fraud Office only to avoid extradition to the United States, exactly where he faced equivalent charges. But he later decided to fight the charges.

In his sentencing remarks on Aug. three, Cooke mentioned there was no separate standard of dishonesty for any group of society, that Hayes had “appreciated at the time” he had acted dishonestly and that it was irrelevant that others had carried out the identical or that managers condoned, embraced or even encouraged it.

He said there was “no doubt” the sums involved ran into millions of dollars and that the conduct in the case “should be marked out as dishonest and wrong and a message sent to the world of banking accordingly”.

Hayes was sentenced consecutively for the conspiracies he was found guilty of although at UBS and these whilst at Citigroup in between 2006 and 2010. Had the marketplace rigging been noticed as a single offence, Hayes would have faced a maximum 10-year sentence.

The sentence shows how the UK judiciary is toughening its stance on white collar crime, lawyers say.

Need to the Court of Appeal side with Hayes, it could order a retrial. But both Hayes’s group and the Significant Fraud Workplace, which is now pursuing confiscation proceedings against Hayes to claw back house deemed to be proceeds of crime, could however take the case to the Supreme Court if they fail at this stage. (Reporting by Kirstin Ridley Editing by Keith Weir)