Tom Hayes, the first banker jailed over Libor interest rate rigging, is suing his former employer UBS for $400m (£300m), claiming he was a “hand-picked scapegoat” for the Swiss bank as it tried to avoid regulatory scrutiny.
The claim, which was publicly filed in a US court in Connecticut on Monday, alleges that UBS misled US authorities and called him an “evil mastermind” behind the alleged Libor scandal, in order to protect senior executives and minimise fines.
Hayes spent five and a half years of an 11-year term in prison after he was accused of being a ringleader in a vast conspiracy to fix the now defunct London Interbank Offered Rate (Libor), which was used to price trillions of pounds worth of financial products, between 2006 and 2010.
The wider scandal, which erupted in 2012, led to fines of almost $10bn for a dozen banks and brokerages. Hayes maintained his innocence and claimed during his original trial that he was taking part in an “industry-wide” practice, accusing regulators of making him a scapegoat.
Hayes is now seeking recompense for the suffering he says he faced as a result of his original ruling.
He is suing UBS for “malicious prosecution”, and says UBS conducted a “fundamentally flawed” investigation in order to pin the blame on Hayes.
Efforts to sue UBS come months after the UK supreme court overturned a decade-old ruling against Hayes in July. That decision was based on faults in the original trial, with the original judge determined to have given “inaccurate and unfair” instructions to the jury that found Hayes guilty on charges of conspiracy to defraud. This meant the former banker was ultimately deprived of a fair trial.
However, the supreme court judges stopped short of fully exonerating Hayes, saying there was “ample evidence” that could have led a jury, if properly directed, to find him guilty. “But the jury was not properly directed,” the ruling explained, adding: “The convictions are therefore unsafe and cannot stand.”
Commenting on the lawsuit against UBS, Hayes said: “It has taken me over a decade to overturn my wrongful conviction and clear my name. My legal team are now rightlyfully holding UBS to account for scapegoating me in order to save billions in fines and protect its senior executives.
“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.”
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“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 added in a statement.
UBS declined to comment.
