Two former U.K.-based traders convicted for their involvement in the London Interbank Offered Rate exchange scandal saw the U.S. Court of Appeals for the Second Circuit toss their entire case Wednesday, including indictments. The panel's reasoning focused on Fifth Amendment grounds regarding the use of compelled testimony gathered in foreign jurisdictions in cases occurring in the United States.

Yet, in the 81-page decision in United States v. Allen, 16-898-cr, the panel of Judges José Cabranes, Rosemary Pooler and Gerard Lynch indicated that there were “substantial” issues at play in the case beyond the constitutional questions, some of which cropped up during oral arguments. These issues appear to have helped guide the circuit's decision and may force the government to change how it pursues foreign defendants going forward.

Debevoise & Plimpton partner Sean Hecker, who was not involved in the case, said the decision has obvious implications for multijurisdictional cases, including current Libor-related cases, but also in the government's Foreign Corrupt Practices Act cases as well. Hecker said the decision is likely to mean the government will have to respond “in real time” to ongoing investigations that anticipate compelled testimony being used.