Tom Hayes sues UBS for $400M, alleges scapegoating in Libor scandal

Tom Hayes, the former British trader imprisoned over the Libor interest rate scandal, has filed a $400 million lawsuit against UBS, alleging “malicious prosecution and corporate scapegoating” by his former employer, according to court documents seen by Fox Business.

Hayes’ complaint was filed Monday in Connecticut Supreme Court and appears to accuse the Swiss banking giant of deliberately portraying him as the mastermind of the scandal to protect top executives and minimize regulatory penalties worth billions of dollars.

Hayes alleges that UBS “deliberately directed the destruction of an innocent man’s life” by providing misleading information to UK and US prosecutors in order to engineer his conviction.

According to the complaint, by making Hayes the “perfect fall guy,” Hayes claims UBS avoided criminal prosecution even when it paid $1.5 billion to settle U.S., U.K. and Swiss regulatory charges in December 2012, when Hayes was criminally charged, according to Reuters.

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The operation was “carefully managed by UBS to control the narrative and direct attention away from senior executives,” the October 23 complaint said. “And like all good theater, the UBS show had a carefully chosen villain: Tom Hayes.”

Reuters also reported that on the same day, Hayes filed another similar case against UBS in New York State Court in Manhattan.

In a statement accompanying the Connecticut lawsuit, Hayes said: “It took me more than a decade to overturn my wrongful conviction and clear my name. My legal team now rightly holds UBS accountable for making me a scapegoat,” according to Reuters.

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Tom Hayes launched a lawsuit against UBS on Monday, seeking $400 million in damages and claiming the Swiss bank made him the fall guy in the Libor-rigging scandal. (Reuters / Reuters Photos)

Hayes’ claim reportedly seeks damages for reputational, professional and personal losses arising from what he calls a “fundamentally flawed” internal investigation.

Hayes was arrested in 2012 amid an investigation into manipulation of the London Interbank Offered Rate (Libor), the benchmark that underpins trillions of dollars in loans and financial products around the world.

At the time, prosecutors said Hayes led efforts to push daily price orders to benefit trading positions at UBS.

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Originally founded in 1854 in Switzerland, UBS is a global financial services company with operations around the world. (iStock/iStock)

Hayes emphasized that his actions were transparent and were carried out under management supervision.

Hayes was convicted in 2015 and sentenced to 11 years in prison, but served more than five years before being released in 2021.

The US charges were later dropped. The Libor scandal, which erupted after the 2008 financial crisis, resulted in nearly $10 billion in fines against global banks and ultimately led to the phasing out of Libor in 2021.

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“Tom Hayes is an innocent man who was indicted, spent over 5 years in prison, and had his career and life destroyed by actions he took publicly, with the knowledge of his superiors at UBS. He brought this case to hold UBS accountable, and get a measure of justice. This seems fair,” Hayes’ attorney, Jonathan Harris, said in a statement to FOX Business.

FOX Business also reached out to UBS, whose spokesperson declined to comment.