Tom Hayes, the former UBS and Citigroup trader whose UK conviction for rigging Libor was quashed in July, has filed a $400 million lawsuit in the United States alleging malicious prosecution by UBS.

Court papers filed in Connecticut claim UBS misled US authorities and cast Hayes as an “evil mastermind” to protect senior executives and minimise regulatory penalties. Hayes argues he was a “hand-picked scapegoat,” with the complaint seeking damages “to deter and punish UBS for its role in intentionally directing the destruction of an innocent man’s life.” UBS declined to comment.

Hayes, who was jailed in 2015 after being condemned by prosecutors as the “ringmaster” of an international fraud conspiracy, spent five and a half years in prison. He maintained throughout that he participated in an industry-wide practice in the years before the financial crisis and that UBS conducted a “fundamentally flawed” investigation to pin blame on him.

“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,” Hayes said.

The UK Supreme Court overturned the convictions of Hayes and former Barclays trader Carlo Palombo, finding that inaccurate directions left juries improperly guided. While the justices stopped short of full exoneration, they ruled the convictions “unsafe and cannot stand.” In the US, an appeal court concluded the conduct at issue did not break rules or laws, and charges against Hayes were dismissed in 2022.

The lawsuit states Hayes was following UBS policy during his time at the bank and alleges the lender “gained control over the investigation into its own alleged misconduct.” It further claims UBS “offered Hayes up on a silver platter” to be prosecuted in both the US and UK, and that those cases were “engineered by UBS’s intentional false and misleading disclosures.”

Hayes said the prosecution devastated his personal and professional life. “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 said. He added: “Nothing can give me back those lost years, or make up for the stress and trauma exacted on me and those close to me.”

Libor, the London interbank offered rate, was used to set borrowing costs for trillions of dollars of financial products and was phased out after 2021.

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