Tom Hayes has initiated a lawsuit against his former employer, UBS, seeking at least $400 million in damages. He claims the bank wrongfully depicted him as the “evil mastermind” behind the Libor rate rigging scandal to protect itself from regulatory sanctions. Hayes, a former trader, recently had his conviction for Libor manipulation overturned by the UK’s highest court, leading him to file the suit in Connecticut alleging “malicious prosecution.”
In the legal documents, which were submitted to state court on Monday, Hayes argues that UBS manipulated the narrative around the scandal to serve its interests. His legal team contends that the bank essentially scapegoated him to divert attention from its own executives and gain favorable outcomes with global regulators. The suit details allegations that UBS took control of the investigation into its misconduct, running a “fundamentally flawed” probe that unfairly attributed blame to Hayes.
Hayes’s lawyers assert, “Tom Hayes did not do anything wrong, and UBS knows it.” They emphasize that he acted under the direction of UBS and followed long-standing practices, despite the bank’s portrayal of his actions as improper. UBS has refrained from commenting on the lawsuit.
The controversy surrounding the manipulation of the London Interbank Offered Rate (Libor) had far-reaching effects, resulting in significant fines and settlements for banks globally. Hayes emerged as the public face of the scandal and spent over five years imprisoned after his conviction in 2015 for rigging the rate. However, he has consistently maintained that he was merely performing his job under the supervision of his higher-ups.
In his US lawsuit, Hayes claims he was “UBS’s handpicked scapegoat” amid the public outrage that erupted following the financial crisis of 2008. The UK Supreme Court overturned his conviction earlier this year, albeit without exonerating him, focusing on whether critical evidence was appropriately presented to the jury. While the court acknowledged substantial evidence that could have supported a conviction, it concluded that Hayes was ultimately denied a fair trial.
Hayes’s legal team argues that UBS “offered Hayes up on a silver platter” during cooperation with global authorities, taking responsibility for document reviews, witness interviews, and identifying potential targets for prosecution. He is now seeking “in excess of $400 million,” stating that UBS’s actions have resulted in significant losses in potential earnings, alongside “emotional, physical, and mental trauma” that has plagued his life since the scandal unfolded.
