Tom Hayes, once celebrated as a star trader at UBS and later vilified as the face of the Libor rigging scandal, is now seeking vindication and restitution in a $400 million lawsuit against his former employer. The legal action, filed in a Connecticut court on October 27, 2025, comes just months after the UK Supreme Court overturned Hayes’s 2015 conviction for manipulating the London Interbank Offered Rate, or Libor—a key benchmark once used to set borrowing costs for trillions of dollars in loans and securities worldwide.
The story of Tom Hayes is a dramatic saga that encapsulates the fallout from the 2008 global financial crisis and the subsequent reckoning in the world’s financial centers. According to BBC, Hayes alleges that UBS made him their "hand-picked scapegoat" in the wake of the Libor scandal, which first came to light in 2012. The scandal revealed that major banks were artificially manipulating interest rates to either profit from trading or mask their own financial troubles during the crisis. Hayes’s lawsuit claims that UBS intentionally positioned him as the fall guy, misleading US authorities and prosecutors to shield senior executives and minimize the bank’s exposure to regulatory fines.
"Hayes became UBS’s handpicked scapegoat," his legal team stated in court documents, as reported by Bloomberg. "Though Hayes has finally cleared his name, UBS’s egregious conduct has irreversibly ruined Hayes’s life." The complaint, filed in Connecticut, alleges that UBS "gained control over the investigation into its own alleged misconduct" and conducted a "fundamentally flawed" internal probe. The bank, it is claimed, "offered Hayes up on a silver platter" to be prosecuted in both the US and the UK, engineering the prosecutions through what Hayes’s lawyers describe as "intentional false and misleading disclosures."
Hayes’s journey through the legal system has been harrowing. In 2015, he was convicted in the UK and sentenced to 14 years in prison (later reduced), making him the first banker jailed over the Libor scandal. He served five and a half years before being released in January 2021. In the US, charges against him were dismissed in 2022. Then, in July 2025, the UK Supreme Court quashed his conviction, finding that the original trial had been unfair due to inaccurate jury instructions. However, the court noted there was "ample evidence" that could have led a properly directed jury to convict him—leaving Hayes’s exoneration partial at best.
Despite the legal ambiguity, Hayes is unequivocal about the personal cost. In statements quoted by BBC and The Telegraph, he said, "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 adds, "Nothing can give me back those lost years, or make up for the stress and trauma exacted on me and those close to me."
The lawsuit details more than just the legal and financial fallout. Hayes claims that at UBS, attempts to influence Libor were "widely accepted" and that he acted at the bank’s direction, not as a rogue operator. "Even though UBS knew that Hayes acted at its direction and in accordance with longstanding practices, it misrepresented his conduct to authorities as improper and independent," allege court documents cited by The Telegraph. Hayes further asserts that he received no formal training on Libor submissions and was subjected to a hostile work environment, bullied by colleagues who called him derogatory nicknames such as "Rain Man" and "Kid Aspergers." These labels, according to his lawyers, reflected both his cognitive profile and the competitive, exclusionary culture that pervaded the trading floor.
Hayes’s legal team is not just seeking financial compensation for lost earnings and emotional distress. The lawsuit, as described in Bloomberg, also aims to "deter and punish UBS for its role in intentionally directing the destruction of an innocent man’s life for their own selfish reasons." Hayes himself has said, "Everyone will look at this as being about money but it’s not. It’s about making sure it doesn’t happen to other people in future, it’s about providing a deterrent." He has pledged to make substantial donations to charities that seek to right miscarriages of justice if he wins his claim.
UBS, for its part, has declined to comment on the lawsuit. The bank was among a dozen financial institutions fined nearly $10 billion collectively for their roles in the Libor scandal. UBS alone paid $1.5 billion to US, UK, and Swiss regulators to settle rate-rigging probes, according to Bloomberg.
The Libor scandal itself is a cautionary tale of unchecked ambition and systemic risk. Libor—the London Interbank Offered Rate—was for decades a bedrock of global finance, underpinning everything from mortgages and car loans to complex derivatives. After the financial crisis of 2008, it emerged that banks were submitting false rates to benefit their own trading positions or to appear healthier than they were. The manipulation was so widespread that it prompted a global reckoning, with dozens of traders prosecuted and the eventual phasing out of Libor after 2021.
Hayes’s story has become emblematic of the blurred lines between aggressive trading and criminal misconduct in the years before and after the financial crisis. His lawyers argue that at the time, influencing Libor rates was not considered criminal, and that the practice was "widely accepted throughout UBS" to make money for the bank. However, as regulatory scrutiny intensified, the lawsuit claims, UBS sought to shield its senior leadership by cooperating with authorities and making Hayes the primary target of prosecution.
The Supreme Court’s decision to overturn Hayes’s conviction has reignited debate over the fairness of past prosecutions related to financial misconduct. The judges noted that the history of these cases—37 people charged and nine trials held in London and New York—raises serious questions about the capacity of the courts to correct judicial error. While some see Hayes as a symbol of justice delayed, others point to the ample evidence of wrongdoing and the need for accountability in the financial sector.
For now, Tom Hayes’s lawsuit against UBS stands as a high-stakes test of corporate responsibility and individual accountability in the aftermath of one of the biggest scandals in modern finance. As the legal battle unfolds, it will not only revisit the events of the past decade but also shape how banks and regulators respond to future crises—and how justice is served when the lines between institutional policy and personal culpability blur.
Hayes’s fight may not restore the years he lost, but it has already forced a global conversation about fairness, scapegoating, and the true cost of financial wrongdoing.
