Tom Hayes, a former trader acquitted of manipulating the London Interbank Offered Rate (Libor), has accused UBS of misconduct related to its internal investigation into the scandal. In a recent court filing in the United States, Hayes’s legal team asserted that the Swiss bank’s inquiry was biased against him from the outset and was deliberately focused on building a case to target him.

Hayes, who spent over five years in prison before the UK Supreme Court overturned his 2015 conviction for conspiracy to defraud, alleges that UBS named its internal probe “Project Chocolate” after his trading floor nickname, “Tommy Chocolate”—a reference to his preference for hot chocolate over alcohol at social events. According to the filing, this naming signified the bank’s intent to single him out within the broader Libor investigation.

In 2022, Hayes initiated a $400 million lawsuit against UBS, claiming the bank provided “misleading disclosures” to U.S. prosecutors that led to his wrongful prosecution while shielding senior executives from scrutiny. He contends that UBS, after shifting to a cooperative stance with the U.S. Department of Justice, “spoon-fed” authorities a case centered on him. The bank has declined to comment on these allegations.

Libor, a benchmark interest rate underpinning trillions of dollars in financial contracts worldwide, became the subject of intense scrutiny after revelations in 2012 that traders at multiple banks had manipulated the rate to benefit their trading positions. The scandal resulted in substantial fines for several banks and prosecutions of 19 traders across the United States and the United Kingdom, many of whom have maintained that their actions reflected standard market practices and that their convictions represented miscarriages of justice.

Hayes was prosecuted by the UK’s Serious Fraud Office and was the first individual convicted by a jury for Libor manipulation. His conviction was quashed by the Supreme Court in 2023, while a related criminal case in the United States was dropped in 2022 following the overturning of convictions against traders at Deutsche Bank.

UBS has moved to dismiss Hayes’s lawsuit, arguing that the case should not proceed in Connecticut, where it was filed, and seeking to invoke the state’s anti-SLAPP (strategic litigation against public participation) legislation intended to protect free speech. However, Hayes’s lawyers contend that this law is being misused to silence a former employee and block legitimate claims.

The legal filings accuse UBS of deliberately misleading U.S. prosecutors, which in turn made Hayes a target of the Serious Fraud Office’s investigation. He alleges that senior bank officials were aware of his conduct and even provided him with a $2.5 million retention bonus to continue his role. The complaint states that UBS falsely portrayed Hayes’s actions as violations of bank policy, whereas he was following directives from senior management.

Hayes seeks damages for the impact of the investigation and prosecution on his career, liberty, reputation, and personal well-being, as well as the harm caused to his family. The case remains ongoing, with UBS continuing to challenge the claims in court.