Ex-trader Tom Hayes files $400m claim against former employer UBS

Former City trader seeks damages over malicious prosecution after Supreme Court quashed conviction

Former City trader Tom Hayes, whose conviction in the LIBOR scandal was quashed by the Supreme Court earlier this year, has launched legal action against his former employer, UBS, seeking more than $400 million in damages.

Hayes, a former securities trader at UBS and Citigroup, was convicted in 2015 on multiple charges of conspiracy to defraud for alleged manipulation of the London Inter-Bank Offered Rate (LIBOR). The LIBOR benchmark, which was used to set interest rates for short-term loans between banks, was phased out in 2023.

He was initially sentenced to 14 years’ imprisonment, later reduced to 11 years, and has consistently maintained his innocence.

After serving five and a half years in prison, Hayes’ case was referred back to the courts by the Criminal Cases Review Commission in 2023, following a US Court of Appeal ruling that cleared two other traders in a related case. Outstanding charges against Hayes in the United States were also dropped.

In July, the UK Supreme Court ruled that the jury in Hayes’ original trial had not been properly directed, finding that his convictions were “unsafe and cannot stand.” The Serious Fraud Office, which had brought the UK prosecution, confirmed that it would not seek a retrial.

Hayes has now filed a complaint in the US State of Connecticut Superior Court for the Judicial District of Stamford, the location of UBS’s main US trading floor. The complaint, served last week, seeks a jury trial and claims malicious prosecution against UBS.

According to the filing, Hayes alleges that UBS “gained control over the investigation into its own alleged misconduct” and carried out a “fundamentally flawed” inquiry. The claim further asserts that UBS “offered Hayes up on a silver platter” and that both the UK and US prosecutions were “engineered by UBS’s intentional false and misleading disclosures.”

Hayes alleges that he was made a “hand-picked scapegoat” and says he is pursuing damages “to deter and punish UBS” and to compensate him for “loss of liberty, emotional and physical harm, harm to his family, and the destruction of his reputation and career.”

In a statement, Hayes said: “Nothing can give me back those lost years or fully make up for the stress and trauma exacted on me and those close to me. No company should run a disingenuous investigation into themselves to protect senior executives by blaming more junior employees.”

He added: “I hope to win my claim and make substantial donations to charities which seek to right miscarriages of justice. 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.”

The complaint has been filed in Connecticut because UBS’s US trading operations are located in Stamford. Hayes’ legal team is seeking a jury trial in that jurisdiction.

Hayes is represented by Jonathan Harris, John Milson, and Tina Lapsia of Harris St. Laurent & Wechsler LLP — the same lawyers who represented former Deutsche Bank trader Matthew Connolly in his claim against his former employer — along with Robert Frost of Frost Law LLC in Connecticut.

UBS has not publicly commented on the filing.

The LIBOR benchmark, once a central measure of short-term borrowing costs between major banks, was officially discontinued in 2023 following years of reform and regulatory overhaul in the wake of manipulation allegations.

Hayes’ lawsuit marks the latest development in a case that has spanned more than a decade, encompassing investigations, prosecutions, and appeals in both the United Kingdom and the United States. The Supreme Court’s July ruling cleared Hayes of all convictions, ending one of the most prominent criminal cases brought in connection with the LIBOR rate-setting process.