Former trader who had conviction quashed sues ex-employer for more than £300m

A financial market trader who spent five and a half years in jail before his conviction was quashed is suing his ex-employer for more than 400 million US dollars (£300 million).

Former Citigroup and UBS trader Tom Hayes was found guilty of multiple counts of conspiracy to defraud over manipulating the London Inter-Bank Offered Rate (Libor) between 2006 and 2010.

He was jailed for 14 years after his conviction in 2015, which was later lowered to 11 years after an appeal.

In July, the Supreme Court quashed his conviction, alongside that of Carlo Palombo, ex-vice president of euro rates at Barclays, after a panel of five justices found there was “ample evidence” for a jury to convict the two men had it been properly directed, but it was not.

In an 82-page judgment, Lord Leggatt said “that misdirection undermined the fairness of the trial”, adding that the direction errors made both convictions unsafe.

Mr Palombo had previously been found guilty of conspiring with others to submit false or misleading Euro Interbank Offered Rate (Euribor) submissions between 2005 and 2009 and was jailed for four years in 2019.

Mr Hayes’ complaint for malicious prosecution, which was filed in the US Superior Court in Connecticut and was made public on Monday, alleges UBS made him a “scapegoat” and that the company “offered Hayes up on a silver platter” to prosecutors.

It also alleges the investment bank knew Mr Hayes was “especially vulnerable, and an especially good scapegoat” because of his diagnosis of autistic spectrum disorder .

According to the filing, the former trader is seeking compensation for the “destruction of his career, the inability to work in his profession, the inability to earn a reliable living, the loss of his liberty, the destruction of his reputation, and the emotional and physical harm inflicted upon him and his family”.

The document says he wishes to “deter and punish UBS for its role in intentionally directing the destruction of an innocent man’s life for its own selfish reasons”.

The 46-year-old said in a statement: “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 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.”

He added: “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.”

The Libor rate was used as a reference point around the world for setting millions of pounds of financial deals, including car loans and mortgages.

It was an interest rate average calculated from figures submitted by a panel of leading banks in London, with each reporting what it would be charged were it to borrow from other institutions.

Euribor was created along with the euro currency in 1999 as a benchmark rate of interest for transactions in euros.

UBS declined to comment.