Tom Hayes, the former British trader jailed 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 lodged Monday in a Connecticut Superior Court and appears to accuse the Swiss banking giant of deliberately framing him as the mastermind of the scandal to shield senior executives and reduce multibillion-dollar regulatory penalties.
Hayes alleges that UBS “intentionally directed the destruction of an innocent man’s life” by feeding misleading information to U.K. and U.S. 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 as it paid $1.5 billion to settle U.S., U.K., and Swiss regulatory charges in December 2012, when Hayes was criminally charged, per Reuters.
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The process “was carefully stage-managed by UBS to control the narrative and steer attention away from senior executives,” the Oct. 23 complaint reads. “And like all good theater, UBS’s show had a hand-picked villain: Tom Hayes.”
Reuters also reported that on the same day, Hayes filed another similar case against UBS in a New York state court in Manhattan.
In a statement accompanying the Connecticut suit, Hayes said: “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,” per Reuters.
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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 a probe into the manipulation of the London Interbank Offered Rate (Libor), which is the benchmark underpinning trillions of dollars in loans and financial products worldwide.
At the time, prosecutors had said that Hayes led efforts to nudge daily rate submissions to benefit UBS’s trading positions.
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Hayes maintained his actions were transparent and carried out under management supervision.
Hayes was convicted in 2015 and sentenced to 11 years in jail, but served more than five before his release in 2021.
The U.S. charges were later dropped. The Libor scandal, which broke after the 2008 financial crisis, resulted in nearly $10 billion in fines against global banks and ultimately led to Libor’s phase-out in 2021.
“Tom Hayes is an innocent man who was indicted, spent over 5 years in jail, and had his career and life destroyed over actions he took openly, with the knowledge of his superiors at UBS. He has brought this case to hold UBS accountable, and obtain a measure of justice. That seems fair,” said Hayes’ attorney, Jonathan Harris, in a statement to FOX Business.
FOX Business also reached out to UBS, whose spokesperson declined to comment.
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