The jury on Wednesday reached unanimous verdicts to acquit five of the brokers—former ICAP PLC brokers Colin Goodman and Danny Wilkinson, former R.P. Martin brokers Terry Farr and James Gilmour, and former Tullett Prebon broker Noel Cryan—on all counts. The sixth broker, ICAP's Darrell Read, was acquitted on one count of conspiring to defraud, but the jury is still deliberating on another count against him.
All six men were accused of conspiring with former UBS Group and Citigroup Inc. trader Tom Hayes of trying to rig the London interbank offered rate, or Libor. Mr. Hayes was convicted and sentenced to 14 years in prison last August, although the sentence was subsequently reduced to 11 years.
"That's four and a half years," Mr. Farr said, choking on tears. The verdicts are a painful setback for the U.K.'s Serious Fraud Office, which brought the case. The agency's director had said the Libor investigation was his priority, and he had hoped that a victory in this trial would pave the way not only to further prosecutions but also to improve the SFO's international credibility.
"These things happen," said Mukul Chawla, the main prosecutor on the case.
The investigations into Libor, under way since spring 2008, have become one of the marquee international efforts to hold bankers and brokers accountable for activity that took place during the financial-crisis era. Roughly a dozen financial institutions have agreed to settle charges that their employees sought to manipulate the ubiquitous benchmark to enhance their profits, in many cases entering criminal guilty pleas and collectively paying billions of dollars in penalties. The Libor case spawned investigations into other financial benchmarks and became a symbol of banker greed and misconduct.
But despite the wide roster of institutions that have admitted wrongdoing, only a small handful of individuals—primarily midlevel traders and brokers—have been criminally charged. No senior managers or executives have faced prosecution.
After a more-than-three-month trial, the 12-person jury in the brokers' case returned its verdict after just a day of deliberations, much faster than the weeks that lawyers had expected jurors to spend sifting through thousands of pages of transcripts and evidence.
Prosecutors painted the six brokers as illegally working with Mr. Hayes to manipulate Libor, which underpins interest rates on trillions of dollars of financial contracts world-wide. The prosecution said the brokers were crucial pieces of Mr. Hayes's vast conspiracy and that they were motivated primarily by greed.
Lawyers for the brokers said the men didn't actually help Mr. Hayes and instead were simply telling the gullible trader what he wanted to hear. They cast doubt on the notion that Mr. Hayes wielded nearly as much influence as claimed by prosecutors in the U.S. and U.K., which have portrayed the mildly autistic man as a criminal mastermind.
The monthslong trial was dominated by mostly arcane written and recorded evidence that showed the brokers communicating with their colleagues and bank traders about movements in interest rates and other benchmarks. But it was spiced up by the colorful nicknames that the brokers, who are all British, went by: Mr. Goodman was known as "Lord Libor," Mr. Read was "Big Nose" and Mr. Wilkinson was called "Danny the Animal," among others.
Mr. Hayes's wife, Sarah Tighe, was in the courtroom for Wednesday's verdict and cheered at the outcome. A person close to Mr. Hayes described the former trader, who is currently in prison, as being "thrilled" when he was informed of the brokers' acquittals.
The prosecution argued that the brokers were rewarded with everything from bribes to bottles of champagne and meals to try to move Libor in directions favorable to Mr. Hayes.
The brokers presented disparate defenses. Most said they had simply been lying to Mr. Hayes about their supposed efforts to influence Libor, desperate to score Brownie points with one of the most prolific traders in Tokyo, where Mr. Hayes was based from 2006 through 2010. Mr. Farr acknowledged that he had tried to help his prized client, but said he lacked a sophisticated understanding of finance and didn't realize that what he was doing was wrong.
The trial was marked by some dramatic moments. On the stand, Mr. Wilkinson, who had managed a team of brokers at ICAP in London, erupted at a prosecutor, accusing the SFO of conducting a politically motivated witch-hunt and threatening to sue the agency. A lawyer for Mr. Cryan later accused the agency's investigators of deliberately ignoring evidence and said the SFO didn't interview some of Mr. Cryan's former colleagues until after the criminal trial was already under way.
Then, in its closing weeks in early January, the trial seemed to nearly get derailed when Mr. Wilkinson suffered a minor stroke one day after court. After a brief hospital stay, he recovered at home and the trial was conducted in his absence. Mr. Wilkinson, in court for the first time on Wednesday to hear the verdicts, sobbed in the hallway, surrounded by family, after he was acquitted.
The verdicts are good news for a constellation of other former brokers and traders, who have been named as co- conspirators of Mr. Hayes and the former brokers but haven't been charged. The SFO had expected to win convictions of most of the former brokers and then to use those verdicts to help wring guilty pleas out of other alleged conspirators, according to defense lawyers who have spoken with the agency's investigators.
Wednesday's courtroom loss represents the latest black eye for the SFO, which has faced criticism from British lawmakers and others for bungling some high-profile cases. The agency had hoped that its conviction of Mr. Hayes, and the stiff prison sentence he received, marked a turning point in its history and would pave the way for wins in other cases involving the alleged manipulation of important financial benchmarks.
The SFO's director, David Green, said in a statement Wednesday that "nobody could sensibly suggest that these charges should not have been brought and considered by a jury."
At a pub near the courthouse Wednesday evening, the brokers and their lawyers, friends and family gathered to celebrate. Mr. Wilkinson, wearing jeans and an untucked, short-sleeve plaid shirt, made a grand entrance.
"Freedom!" he bellowed, his arms lifted above his head in a V. The brokers roared, and someone handed him a beer.
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