A former City trader whose conviction in the so-called LIBOR scandal was quashed by the Supreme Court in July is suing his ex-employer for more than $400m.
Tom Hayes, a former securities trader at UBS and Citigroup, was convicted in 2015 of multiple charges of conspiracy to defraud in relation to manipulations of the London Inter-Bank Offered Rate. LIBOR, which was phased out in 2023, is benchmark interest rates for short-term loans between banks. The LIBOR rates were calculated daily from submissions by a panel of major banks.
Hayes was sentenced to 14 years’ imprisonment, later reduced to 11 years, and has always maintained his innocence.
Hayes, who served five-and-a-half years in prison, claims he was the bank’s ‘hand-picked scapegoat’. His conviction was referred to the Court of Appeal by the Criminal Cases Review Commission in 2023 following a US Court of Appeal decision clearing two other traders convicted in 2022. Outstanding charges against Hayes in the US were also dropped.
This summer, the Supreme Court found the jury in Hayes’ trial had not been properly directed and his convictions were ‘therefore unsafe and cannot stand’. The Serious Fraud Office, which bought the UK prosecution, confirmed at the time it would not seek a retrial.
Hayes served his complaint on UBS last week, seeking a jury trial in the US State of Connecticut Superior Court for the Judicial District of Stamford, the location of UBS's main US trading floor. The claim for malicious prosecution alleges UBS ‘gained control over the investigation into its own alleged misconduct’ and conducted a ‘fundamentally flawed’ investigation.
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It alleges that UBS ‘offered Hayes up on a silver platter’ and that tthe UK and US prosecutions were ‘engineered by UBS’s intentional false and misleading disclosures’.
Hayes said he is seeking damages to ‘deter and punish UBS’ and to compensate him for his loss of liberty, emotional and physical harm, the harm to his family and the destruction of his reputation and career.
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. 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.’
Hayes is represented in his US claim by Jonathan Harris, John Milson and Tina Lapsia of Harris St. Laurent & Wechsler LLP, who represented Matthew Connolly in his claim against his former employed Deutsche Bank, along with Robert Frost of Frost Law LLC in Connecticut.
UBS declined to comment.
