Banker Tom Hayes Sues UBS for $400M Over Libor Case

coin Tom Hayes, the first banker to face imprisonment for his involvement in the Libor interest rate manipulation scandal, has initiated a lawsuit against his former employer, UBS, seeking a staggering $400 million (£300 million). Hayes contends that he was unfairly labeled a “hand-picked scapegoat” as UBS attempted to evade regulatory scrutiny.

The lawsuit, filed in a Connecticut US court on Monday, accuses UBS of misleading American authorities and depicting Hayes as the so-called “evil mastermind” behind the Libor scandal. This portrayal, he claims, was a tactic to shield senior executives from accountability and to mitigate potential financial penalties for the bank.

Hayes served five and a half years of an 11-year sentence after being accused of orchestrating a widespread conspiracy to manipulate the now-defunct London Interbank Offered Rate (Libor). This rate was crucial for pricing trillions of pounds worth of financial products from 2006 to 2010. The scandal, which came to light in 2012, ultimately resulted in nearly $10 billion in fines imposed on a dozen banks and brokerages.

Throughout the legal proceedings, Hayes has consistently maintained his innocence. During his original trial, he asserted that his actions were part of a broader, industry-wide practice, and accused regulators of targeting him as a scapegoat to deflect attention from the systemic issues within the banking sector.

Banker Tom Hayes Sues UBS for $400M Over Libor Case Hayes is pursuing compensation for the anguish he experienced following his conviction. He alleges “malicious prosecution” against UBS, arguing that the bank conducted a “fundamentally flawed” investigation aimed at shifting blame onto him. The recent lawsuit follows a significant legal victory for Hayes when the UK Supreme Court overturned a decade-old ruling against him in July.

The Supreme Court's decision highlighted substantial errors in Hayes' original trial, noting that the judge had provided “inaccurate and unfair” instructions to the jury, which ultimately resulted in Hayes’ conviction for conspiracy to defraud. The court acknowledged that while there was sufficient evidence that could potentially lead a properly directed jury to convict, the failure to guide the jury correctly rendered the convictions unsafe and thus invalid.

In a statement regarding the lawsuit against UBS, Hayes expressed his determination to hold the bank accountable: “It has taken me over a decade to overturn my wrongful conviction and clear my name. My legal team are now rightfully holding UBS to account for scapegoating me in order to save billions in fines and protect its senior executives.”

He further elaborated on the personal toll the scandal has taken on his life, stating, “My life was ruined by the bank’s actions – I lost my liberty and my marriage, missed out on my son’s childhood, and my physical and mental health suffered terribly. UBS also destroyed my reputation and career.”

Hayes is eager to present his case to a jury, hoping to scrutinize UBS’s conduct during these tragic and avoidable events. He concluded, “I look forward to putting my case in front of a jury to scrutinise UBS’s conduct in relation to these tragic and unnecessary events.”

As of now, UBS has opted not to comment on the ongoing lawsuit.