In a dramatic twist to one of banking's biggest scandals, Tom Hayes - the first trader jailed for manipulating the Libor interest rate - is launching a staggering £400 million legal battle against his former employer, UBS.
The former Citigroup and UBS trader, who served five and a half years in prison, claims the Swiss banking giant effectively pressured him into misconduct then left him to face the consequences alone when regulators came knocking.
The Whistleblower's Revenge
Hayes, who was released from prison in 2021, alleges UBS "instructed, encouraged, and permitted" him to manipulate the London Interbank Offered Rate (Libor), which forms the basis for trillions of pounds in global financial products.
His lawsuit represents a remarkable role reversal: the convicted banker is now positioning himself as something of a whistleblower, claiming senior management were fully aware of the practices that would eventually see multiple institutions fined billions and several bankers imprisoned.
A Decade-Long Legal Battle
The Libor scandal erupted over a decade ago, revealing widespread manipulation of the benchmark interest rate by multiple major banks. Hayes became the public face of the controversy when he received an 11-year sentence in 2015, later reduced on appeal.
Now he's turning the tables, arguing in legal documents that UBS "threw him under the bus" to protect more senior figures within the organisation.
What the Lawsuit Claims
- UBS created a culture that encouraged rate manipulation
- Senior management were aware of and condoned the practices
- The bank failed to provide adequate legal support during his prosecution
- Hayes suffered significant financial and reputational damage
- The £400m claim covers lost earnings and damages
The Banking World Watches Closely
This unprecedented lawsuit sends shockwaves through the financial sector, potentially reopening old wounds for an industry that paid over $9 billion in fines related to Libor manipulation.
Legal experts suggest the case could set a powerful precedent for how financial institutions handle employees accused of misconduct, particularly when senior management awareness is alleged.
A UBS spokesperson declined to comment on ongoing legal proceedings, but the banking giant is expected to vigorously contest the claims.
