Employee Survival Guide®
The Employee Survival Guide® is the no-nonsense employment law podcast made exclusively for employees. After 200+ episodes, we deliver the straight talk your employer and HR don’t want you to hear — covering every work and career issue that actually matters.
Hosted and produced by Mark Carey, a veteran employment lawyer with 29 years of experience who has litigated hundreds of cases — including class actions — in state and federal courts nationwide. Mark cuts through the BS with blunt, practical advice, always presenting both sides so you can make informed decisions. This podcast is also about your employment story and other courageous employees who have spoken out about their employers. If you work for a living, this is your podcast.
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Employee Survival Guide®
UBS Allegedly Curated Evidence To Sacrifice An Employee: Tom Hayes v. UBS case update
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A single trader helps save a bank during the 2008 crash, gets dangled a $2.5 million retention bonus, and then later becomes the face of a global criminal narrative. That’s the whiplash at the center of Tom Hayes’ fight against UBS and the reason we’re spending time on a dense but crucial set of court filings out of Connecticut.
We break down two major litigation updates from the Connecticut Superior Court: the judge denies UBS’s attempt to move the case onto the complex litigation docket, and Hayes delivers a major discovery package of more than 350 pages, including internal materials and his sworn affidavit. From there, we walk the timeline that matters for malicious prosecution claims, starting with an April 2010 CFTC subpoena served on UBS in Stamford focused on US dollar LIBOR, and the alleged pivot after UBS retains outside counsel and shifts into cooperation mode. We also explain why a DOJ email seeking Hayes’ identifying details, including a Japanese pension number, is such a telling breadcrumb.
Then we slow down and make the finance readable: what LIBOR is, how it was set, why US dollar LIBOR lowballing points toward executive-level reputational risk, and why Yen LIBOR manipulation frames the story as a trading-floor problem. We dig into the newly highlighted internal emails that praise Hayes’ market impact and “invaluable” connections, contrast them with criticism that later becomes weaponizable, and explain how corporate proffers, selective Bloomberg chats, and e-discovery search terms can shape what regulators and the public believe. If you’ve ever been told to follow an unwritten rule you suspect the company would deny later, this conversation is for you.
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A Bonus Then A Prison Cell
SPEAKER_01Welcome to another episode of the Employee Survival Guide, produced by Employment Attorney Mark Carey.
SPEAKER_00Oh, this is gonna be a heavy one today.
SPEAKER_01Yeah, it really is. Because I mean, I just want you to imagine something for a second. Imagine making your boss so much money during the 2008 financial crash, like literally saving the company's balance sheet when everyone else is just burning to the ground.
SPEAKER_00Right. The whole market was in free fall.
SPEAKER_01Exactly. And you do so well that they offer you a $2.5 million bonus just to stay.
SPEAKER_00Just to not walk out the door.
SPEAKER_01Right. Now imagine that same boss, just a few years later, using those exact same skills they just paid you for to help the federal government send you to prison.
SPEAKER_00It sounds like a movie script, honestly.
SPEAKER_01It does, but that is the $400 million reality of Tom Hayes. And it's exactly what we are going to unpack today.
SPEAKER_00Aaron Powell And for those of you listening to the audio, I think we really need to set the scene for the visual setup today.
SPEAKER_01Aaron Powell Oh, yeah. The backdrop is perfect for this. So my co-host is broadcasting with this split screen going on. On one side, there's this imposing classical stone facade of the Stanford, Connecticut Superior Court.
SPEAKER_00Aaron Powell Right. Very heavy, quiet, immovable.
SPEAKER_01The weight of the law.
SPEAKER_00The weight of the law.
SPEAKER_01And then on the other side, there's a flashing red and green financial ticker tape just zooming by at the absolute speed of light.
SPEAKER_00Aaron Powell Which is just the perfect representation of what happens when that slow grinding machinery of the justice system totally collides with the hyper-accelerated world of global banking.
SPEAKER_01Aaron Powell Yeah, it really is the central tension of this whole story. You've got the architecture of the law meeting the relentless speed of international finance.
SPEAKER_00Aaron Powell And when those two worlds crash into each other, the fallout is immense. And unfortunately, it usually lands squarely on the individual employee.
SPEAKER_01Aaron Powell Which brings us to our mission today for you, the listener. Employment attorney Mark Carey has been closely following the developments in the Connecticut Superior Court case that Tom Hayes
Court Wins And New Discovery
SPEAKER_01filed against his former employer, the global banking giant UBS.
SPEAKER_00Aaron Powell And we actually have two really critical mandatory litigation updates that we need to state right up front.
SPEAKER_01Aaron Powell Right, because they really dictate everything we're about to talk about. So first up, the court recently denied UBS's motion to switch this case to the complex litigation docket.
SPEAKER_00Aaron Powell Which, I mean, we really should pause to appreciate what a massive procedural victory that is for Hayes.
SPEAKER_01Aaron Powell Yeah. Why is that such a big deal?
SPEAKER_00Aaron Powell Well, corporate defendants like UBS, they almost always want to move cases to complex litigation dock, or they try to move them out of local venues entirely.
SPEAKER_01Aaron Powell Just to make it harder on the plaintiff.
SPEAKER_00Aaron Powell Exactly. It makes the process more opaque, way more expensive, and just drawn out forever. So by denying that motion, the court is saying no. This case will remain right here in the Stanford, Connecticut courthouse as a regular case. Wow.
SPEAKER_01Okay.
SPEAKER_00Yep. It will not be transferred to another location in Connecticut. It keeps the pressure highly localized to where UBS actually has its North American headquarters.
SPEAKER_01Aaron Powell That is huge. And the second major update is a massive discovery breakthrough. Tom Hayes has basically fought tooth and nail for discovery disclosures from UBS.
SPEAKER_00Aaron Powell He's been demanding they show what they were saying behind closed doors.
SPEAKER_01Aaron Powell Exactly. He's like, show me what you were talking about while you were talking to the government. And he actually successfully received them.
SPEAKER_00Aaron Powell That's rare. I mean, getting those documents is incredibly hard.
SPEAKER_01Aaron Powell It is. Now, obviously, some of these documents are redacted. That's standard in these big corporate battles. But Hayes has just provided over 350 pages of new, entirely unseen material for the court's review.
SPEAKER_00Aaron Powell 350 pages.
SPEAKER_01Trevor Burrus Huge document, um. Yeah. And he filed this material in opposition to the defendant's motion to dismiss the case. And crucially, this includes a sworn affidavit by Tom Hayes himself.
SPEAKER_00Aaron Powell Which completely changes the landscape here.
SPEAKER_01Trevor Burrus We are no longer just operating in the realm of allegations or speculative theories from some initial complaint. Trevor Burrus, Jr.
SPEAKER_00Right. We have actual evidence now.
SPEAKER_01Aaron Ross Powell Exactly.
SPEAKER_00We're looking at internal corporate emails, timestamps, strategy memos, and actual sworn testimony submitted under penalty of perjury.
SPEAKER_01Aaron Powell Which is why we need to establish some absolute ground rules for today. I want to clarify to you, the listener, that our mission today is to stick strictly to the facts of this new document dump. We have to, yeah. Alongside our previous explorations of this case. So there will be absolutely no speculation here. None at all. We are not going to hallucinate facts. And we are certainly not taking political sides. We are just going to ensure a fair, impartial, and accurate presentation of the court documents.
SPEAKER_00Aaron Powell Because honestly, the facts themselves are explosive enough, we really don't
Hayes’ Background And Quashed Conviction
SPEAKER_00need to embellish them.
SPEAKER_01Not even a little bit. So to understand why this specific 350-page dump is so explosive, we first need to understand the stakes. Hayes is suing UBS for $400 million for malicious prosecution. Aaron Powell $400 million. Yeah, it's an astronomical number. So we need to look at how the government's crosshairs were moved on to him in the first place. Let's do a really quick level set on the foundational facts.
SPEAKER_00Aaron Powell Good idea. Just for anybody who might need a refresher.
SPEAKER_01Right. So Tom Hayes is a former UBS trader who operated out of Tokyo, Japan. He's been diagnosed with autism spectrum disorder.
SPEAKER_00Trevor Burrus And he ultimately served five years in a UK prison. Right.
SPEAKER_01Right. Trevor Burrus, Jr. Yes. Five years in a United Kingdom prison for allegedly manipulating Yen LIBOR rates. But here is the massive plot twist. The thing that changes history. His conviction was formally quashed by the UK Supreme Court in July 2025.
SPEAKER_00I mean, it is just hard to overstate the magnitude of that reversal.
SPEAKER_01Trevor Burrus, it's unheard of, right?
SPEAKER_00Totally unheard of. Five years of a man's life were taken away. His reputation was globally destroyed. I mean, he was literally the poster child for financial corruption.
SPEAKER_01Aaron Powell Yeah, his face was everywhere.
SPEAKER_00Right. And then the highest court in the land effectively looked at the underlying legal theory of the prosecution and just said, this conviction cannot stand.
SPEAKER_01Wow.
SPEAKER_00And that reversal is the bedrock of what brings us here today because it opens the door to ask: well, if he shouldn't have been in prison, how did he get put there?
SPEAKER_01Aaron Powell Exactly. And that leads directly to his central argument. Hayes is arguing that he was a scapegoat, like a human sacrifice offered up by UBS to save its senior executives.
SPEAKER_00Aaron Powell To save the whole corporate franchise from the wrath of global regulators.
SPEAKER_01Aaron Powell Yeah. And when you look at Exhibit 32 in this new document dump, which is Hayes' sworn affidavit, the timeline of the government's investigation tells a
The Pivot From Dollar To Yen
SPEAKER_01very specific story.
SPEAKER_00Aaron Powell A very suspicious story, honestly. Aaron Powell Yeah.
SPEAKER_01Because according to the documents, the U.S. government's investigation originally focused exclusively on U.S. dollar LIBOR.
SPEAKER_00Right. Not yen LIBOR, US dollar.
SPEAKER_01Exactly. And this all started with a Commodity Futures Trading Commission or CFTC subpoena that was sent directly to UBS in Stanford, Connecticut in April 2010.
SPEAKER_00Aaron Powell So April 2010 is our ground zero. The U.S. government is looking at the US dollar. They're knocking on the door of the Stanford headquarters. Right. And according to the documents, UBS's initial posture was basically resistance. They pushed back on the subpoena.
SPEAKER_01They didn't want to hand anything over.
SPEAKER_00Exactly. They defended their internal LIBOR processes, they were fighting the regulators. But then the timeline just shifts dramatically at the end of the year.
SPEAKER_01Okay, let's unpack this. Because this is where the magician's misdirection comes in. Did UBS essentially throw a smoke bomb in New York and point a giant spotlight at Tokyo to keep the feds away from the C-suite?
SPEAKER_00That's exactly what the documents suggest. Because in December 2010, UBS executes this massive pivot. They hire outside counsel, the heavy-hitting law firm Gibson Dunn.
SPEAKER_01Right. They bring in the big guns.
SPEAKER_00Yeah, and they suddenly flip from resistance into full cooperation mode.
SPEAKER_01Oof.
SPEAKER_00And seemingly overnight, the investigation's focus is forcefully diverted away from the U.S. dollar LIBOR.
SPEAKER_01Away from the executives in Stanford.
SPEAKER_00Exactly. And redirected straight toward Yen LIBOR and a trader named Tom Hayes sitting all the way in Japan.
SPEAKER_01Aaron Powell But wait, let me play devil's advocate for a second here. Isn't that just, you know, standard corporate compliance? Like if the DOJ or the CFTC subpoenas a massive bank, aren't they legally required to hire a law firm, do a sweep, and hand over what they find?
SPEAKER_00Aaron Powell That is exactly the defense the bank would absolutely raise. And it's a fair question.
SPEAKER_01Aaron Powell Right. Like couldn't they just say, hey, we looked under the hood like you asked, and we found this guy in Japan doing bad things.
SPEAKER_00Aaron Powell What's fascinating here is the chronology. The difference between standard compliance and what Hayes alleges is orchestration really comes down to the specific communications revealed in these new documents.
SPEAKER_01Oh, right.
SPEAKER_00Exhibit two. Look at Exhibit 2. On January 4th, 2011, the Department of Justice sends an email to UBS stating that a decision was made on an issue, quote, of importance to UBS.
SPEAKER_01Of importance to UBS. We don't know exactly what that decision was, right?
SPEAKER_00We don't. But we know what happened immediately after. Just two weeks later, a DOJ prosecutor named Luke Marsh is suddenly emailing Gibson Dunn asking for Tom Hayes' highly specific identifying information.
SPEAKER_01Actually, I have uh exhibit four right here. Let me read from it so we know exactly what we're dealing with. So prosecutor Marsh writes on January 19, 2011, quote, thank you for providing us with Tom Hayes' Japanese pension number. We are still seeking further identifying information for Mr. Hayes, such as his date of birth, UK national insurance number, regulatory registration numbers, end quote.
SPEAKER_00I mean, let's just break down why that email is so devastating to the idea of just, you know, organic standard compliance.
SPEAKER_01Aaron Powell Yeah. Why is a U.S. prosecutor asking for a Japanese pension number?
SPEAKER_00Aaron Powell Because it shows the sudden pivot to Tom Hayes was not organic to the DOJ's own independent findings. The DOJ wasn't randomly digging through millions of Tokyo trades, crunching the numbers and stumbling upon Hayes through their own forensic accounting.
SPEAKER_01Aaron Powell Right. They wouldn't even have his Japanese pension number.
SPEAKER_00Aaron Powell Exactly. The pivot was seemingly orchestrated by UBS's lawyers who were controlling the narrative and feeding specific names and pension numbers to the prosecutors.
SPEAKER_01It is wild. The government comes knocking, asking about the US dollar in Connecticut, and UBS essentially says, hey, don't look at the US dollar. Look at this guy in Japan doing yen. Here's his pension number.
SPEAKER_00Aaron Powell And the government just says, okay, send us his date of birth too.
SPEAKER_01That's a breathtaking redirection of federal resources. Aaron Powell.
SPEAKER_00And we have to remember the intense pressure UBS was under at that exact moment. Gibson Dunn had reportedly advised UBS that the bank itself and its senior management were likely to face criminal charges if they didn't cooperate.
unknownTrevor Burrus, Jr.
SPEAKER_01If they didn't offer up a target.
SPEAKER_00Trevor Burrus, Jr. Exactly. The DOJ in that era was under immense political pressure to produce individual scalps for financial crimes. That's a terrifying dynamic. The corporation holds the evidence, the government demands a target, and the corporation has to offer someone up to save itself.
SPEAKER_01Okay, I need to stop you there because I want to make sure you, the listener, completely understand the underlying mechanics before we go deeper into these documents.
LIBOR Explained In Plain English
SPEAKER_01We keep throwing around the term LIBOR.
SPEAKER_00Right. It's a dense financial concept.
SPEAKER_01Yeah, we mentioned US dollar LIBOR and Yen LIBOR. For someone who doesn't work on a trading floor, can you do a quick plain English breakdown? What actually is LIBOR and why does the difference between the US dollar and the yen matter so much here?
SPEAKER_00It is essential context, yeah. So LIBOR stands for the London Interbank Offered Rate. Essentially, it was the benchmark interest rate that dictated how much it costs for the world's biggest banks to borrow money from each other.
SPEAKER_01Like the foundational interest rate for the whole economy.
SPEAKER_00Exactly. Trillions of dollars of mortgages, student loans, credit cards, corporate derivatives, they were all pegged to LIBOR.
SPEAKER_01So if LIBOR moves even a fraction of a percent, the cost of a mortgage in Ohio or a loan in Berlin changes.
SPEAKER_00Aaron Powell Precisely. Now, how is it set? It wasn't set by a central computer looking at actual executed trades.
SPEAKER_01Aaron Powell Wait, it wasn't?
SPEAKER_00No. It was set by a daily poll. Every day at around 11 a.m. London time, a panel of major banks would submit a number answering simple hypothetical question.
SPEAKER_01Aaron Powell Just a hypothetical question.
SPEAKER_00Yeah. Basically, at what rate could you borrow funds today? The highest and lowest submissions were thrown out, and the remaining numbers were averaged to create that day's LIBOR rate.
SPEAKER_01Aaron Powell So it was essentially an honor system among massive banks?
SPEAKER_00Aaron Ross Powell Exactly. An honor system for trillions of dollars. And there wasn't just one LIBOR. There was a LIBOR for different currencies. Aaron Powell Right. So US dollar, British pound, Swiss franc, and Japanese yen LIBOR. Different panels of banks submitted rates for different currencies.
SPEAKER_01Aaron Ross Powell Okay, so bringing it back to the subpoena, the CFTC and the DOJ were investigating the US dollar LIBOR. Why?
SPEAKER_00Aaron Powell Because during the 2008 financial crisis, there was a massive suspicion that banks were artificially lowering their US dollar LIBOR submissions.
SPEAKER_01Aaron Powell Why would they do that?
SPEAKER_00Aaron Powell Well, if a bank submitted a high interest rate, it signaled to the market that the bank was struggling to find cash, which could cause a panic and completely tank their stock.
SPEAKER_01Oh, I see.
SPEAKER_00So the theory was that executives at the very top of these banks were directing their submitters to lowball the US dollar LIBOR to make the banks look healthier than they actually were.
SPEAKER_01Aaron Powell Ah, to hide how bad things were during the crash.
SPEAKER_00Exactly. This is what we call lowballing. And this would implicate the highest levels of management.
SPEAKER_01Okay. So if the government investigates US dollar LIBOR, they are looking straight at the C-suite. They are looking at the executives who are trying to manage the public perception of the bank's solvency during a historic meltdown.
SPEAKER_00Right. But yen LIBOR, that is something completely different.
SPEAKER_01Aaron Powell Because it's a different currency.
SPEAKER_00Yes. Yen LIBOR is traded in a different time zone, largely dealing with different financial products. Tom Hayes wasn't accused of lowballing to protect UBS's corporate reputation. Trevor Burrus, Jr.
SPEAKER_01Right. He was just a trader.
SPEAKER_00Exactly. He was trying to move the yen LIBOR infinitesimally up or down on specific days just to benefit his specific trading book. It was micro-level trading strategy, not macro level corporate survival.
SPEAKER_01So by shifting the government's focus from US dollar lowballing to yen trading, UBS effectively moved the spotlight from the boardroom straight to the trading floor.
SPEAKER_00It was a brilliant, self-serving pivot.
SPEAKER_01That is a phenomenal breakdown. And it makes the timeline in these documents so much more potent. Because since UBS successfully shifted the spotlight to Hayes and the Yen, we have to look at exactly what they were telling the government about him versus what they were saying about him internally.
SPEAKER_00Trevor Burrus Right, because the documents show two completely different faces of UBS.
SPEAKER_01Yeah. And this brings
The 2009 Emails And Retention Bonus
SPEAKER_01us to what might be the most psychologically disturbing revelation in the entire 350-page dump, the newly uncovered 2009 internal emails.
SPEAKER_00The contrast here is just staggering.
SPEAKER_01It shifts the whole story from legal maneuvering to a deep look into corporate psychology and how neurodivergent employees are viewed just as utilities.
SPEAKER_00Yeah.
SPEAKER_01Let's start with the name of UBS's internal investigation itself. According to the documents, when Gibson Dunn and UBS were conducting their investigatory work for the DOJ, they gave it an internal code name. They called it Project Chocolate.
SPEAKER_00Which is just wild.
SPEAKER_01It is. Because why does that matter? Well, Tom Hayes had a very well-known internal nickname at UBS. People called him Tommy Chocolate.
SPEAKER_00Aaron Powell, I mean the braziness of that is hard to even wrap your head around.
unknownRight.
SPEAKER_01Like they didn't name it Project Alpha or Project Shield.
SPEAKER_00Aaron Powell Or Project Integrity.
SPEAKER_01Right.
SPEAKER_00No, they named the supposedly independent objective corporate investigation directly after the specific employee they were investigating.
SPEAKER_01Aaron Powell Which tells you they had the target painted on his back from the jump.
SPEAKER_00Aaron Powell Exactly. In the world of corporate investigations, that reveals a heavily predetermined outcome. You do not name an investigation that spans millions of documents after one mid-level trader in Tokyo unless that trader is the intended centerpiece of the narrative you're building for the government.
SPEAKER_01Aaron Powell It's just so blatant. Now let's look at exhibits four, five, and six. These are internal UBS emails from July 2009. This is long before the DOJ subpoenas, long before any regulators were knocking on the door.
SPEAKER_00Aaron Powell Right, just everyday corporate emails.
SPEAKER_01Aaron Powell Yeah. These are managers just analyzing Hayes as an employee. And an internal manager literally sends an email asking for, quote, some balancing point against this bullshit regarding Hayes.
SPEAKER_00Aaron Powell And the responses to that request, the the balancing points, they create this dual portrait of Hayes that UBS would later selectively edit to ruin his life.
SPEAKER_01Aaron Powell Yeah, let's look at the praise first, because it is immense. The emails state he dominates the interbank market in the front end with a 35% market share. They call him a superb market forecaster.
SPEAKER_00Aaron Powell I mean 35% market share for one trader is huge.
SPEAKER_01It's massive. I'm going to read directly from Exhibit 5 so you can hear exactly how UBS executives talked about him when the money was rolling in.
SPEAKER_00Please do.
SPEAKER_01The email says, quote, it's not just the money he can make, it's the money he will save UBS and has done in times of crisis. During Lehman, we excelled whilst other banks lost. Having a risk manager of his caliber reduces our tail risk and increases our averages. Definitely. And they also explicitly mention his strong connections to LIBOR setters in London and call this information invaluable for the derivatives books. They even call him a genuinely nice person who is a consistent winner.
SPEAKER_00Aaron Powell Okay, so let's break this down because it proves management knew exactly what he was doing and valued it highly. Let's start with the Lehman crisis. Trevor Burrus, Jr.
SPEAKER_01Right, September 2008.
SPEAKER_00When Lehman brothers collapsed, the global financial system essentially froze. Banks stopped lending to each other because they didn't know who was going to go bankrupt next. It was total chaos.
SPEAKER_01Aaron Powell And during that chaos, according to UBS's own management, Tom Hayes protected them.
SPEAKER_00Aaron Powell He did.
SPEAKER_01Okay, hold on. I need an explain it like I'm five moment here. The email says he is invaluable for the derivatives books and that he reduces our tail risk. What is a derivative book? What is tail risk? And how does manipulating a LIBOR rate physically save a bank money during a crisis like Lehman?
SPEAKER_00Okay, let's break it down. A derivative is just a financial contract whose value is derived from something else, in this case, the yen LIBOR rate. Hayes traded interest rate swaps.
SPEAKER_01Okay.
SPEAKER_00In a simple swap, two parties agree to exchange cash flows. One party pays a fixed interest rate and the other party pays a floating interest rate. That floating rate was usually tied to LIBOR.
SPEAKER_01Aaron Powell Okay. So if I am UBS and I have a contract where I receive money based on where LIBOR is today, I want LIBOR to be high. If I have a contract where I have to pay money out based on LIBOR, I want it to be low.
SPEAKER_00Exactly.
SPEAKER_01Okay.
SPEAKER_00Now a book is just the trader's portfolio of all these thousands of contracts. Hayes had a massive derivative book.
SPEAKER_01Because he held 35% of the market share.
SPEAKER_00Right. His book was enormous. Now, tail risk refers to the risk of extreme rare events like the collapse of Lehman Brothers that cause massive unexpected losses.
SPEAKER_01I see.
SPEAKER_00During the Lehman crisis, markets were swinging wildly. Hayes' ability to forecast the market and his quote strong connections to LIBOR setters in London meant he could position his massive portfolio swaps so that UBS did lose its shirt when the market crashed. He managed the risk so well that UBS excelled while other banks were bleeding billions.
SPEAKER_01So when the email says his connections to LIBOR setters are invaluable, management isn't just turning a blind eye to his communications with other banks. No, not at all. They are actively praising those communications as a core strategy that is saving the bank from disaster.
SPEAKER_00Aaron Powell Exactly. They know he is talking to the people who set the rate. They view it as a competitive advantage. It's a documented feature of his trading style, not a bug.
SPEAKER_01Aaron Powell But then you look at the other side of these exact same 2009 email chains, the criticism, because the manager asked for a balancing point against this BS.
SPEAKER_00Aaron Powell Right. They needed some negatives.
SPEAKER_01And the emails note that Hayes can be immature, that he is an explosive person regularly losing his temper. They note that he forces brokers to put wrong prices on screens for revaluation purposes.
SPEAKER_00Aaron Powell Which is aggressive.
SPEAKER_01Yeah. And that other banks in Tokyo actually started to make jokes about it. The email literally says his behavior in the market is far from professional.
SPEAKER_00Aaron Powell We have to analyze the mechanism of that criticism carefully. Putting wrong prices on screens for revaluation purposes. What does that mean?
SPEAKER_01Yeah, what is that?
SPEAKER_00Well, brokers use electronic screens to show the rest of the market where trading's happening. If Hayes pressured a broker to show a slightly different price on a screen temporarily, it might affect how his portfolio is valued at the end of the day.
SPEAKER_01Ah, okay.
SPEAKER_00It's aggressive, it's messy, and as the email notes, it made him the butt of jokes among other banks in Tokyo. But notice what management's reaction to this quote unquote unprofessional behavior is.
SPEAKER_01Right. Let me ask the most obvious question in the world. If his behavior was, as this manager wrote, far from professional, and if he was an explosive liability who was the joke of the Tokyo banking scene, why did senior management, including the co-CEO of the investment bank, Karsten Kangater, subsequently offer him a $2.5 million retention bonus to stay at the bank?
SPEAKER_00That is the central paradox of this entire case. And it just exposes the profound clinical dissonance at the heart of UBS's corporate culture.
SPEAKER_01They didn't care about the behavior as long as he made money.
SPEAKER_00Exactly. UBS was more than happy to exploit Hayes' neurodivergence, his autism, his hyperfocus, his relentless socially awkward drive when it made them a fortune and saved their balance sheet during the 2008 crash. The 2.5 million. Dollar retention bonus is empirical proof that senior management not only knew about his methods, including those invaluable connections to LIBOR setters, but they actively rewarded and incentivized them.
SPEAKER_01They were effectively saying, We know you are messy, we know you scream on the phone, we know you push brokers around, but it makes us money, so please don't leave.
SPEAKER_00Exactly. They bought his behavior, they funded it.
SPEAKER_01But the moment the regulators knocked on the door in Stanford.
SPEAKER_00The moment the CFTC and the DOJ showed up with subpoenas threatening the C-suite.
SPEAKER_01The calculus changed entirely.
SPEAKER_00Suddenly, those same quirks, that same lack of social polish, that explosive temper, UBS weaponized those exact traits.
SPEAKER_01They took the behaviors of his autism that they had profited from, and they used them to paint him as a volatile, uncontrollable rogue actor. They built a narrative that he was an erratic mastermind operating entirely outside of the bank's control, despite having just paid him millions of dollars to do exactly what he was doing.
SPEAKER_00It is genuinely chilling when you look at it in that light. They loved his autism when it made the money, and they weaponized it to throw him in a cage when they needed a scapegoat.
SPEAKER_01Here's where it gets really interesting, though. Knowing that UBS possessed these conflicting internal views, how exactly did they package this information for the Department of Justice? Because the new documents reveal a presentation that wasn't just handed over, it was curated down to the microscopic level.
SPEAKER_00This is where we
Proffers And The Power Of Omission
SPEAKER_00have to examine the legal mechanics of the corporate proffer. In February 2011, Gibson Dunn and UBS presented a proffer to the federal prosecutors.
SPEAKER_01Okay, stop right there. What is a proffer in this context? Paint a picture of what this actually looks like in reality. Is this a document they mail in, a meeting?
SPEAKER_00Aaron Ross Powell A proffer session in a major corporate investigation is a highly choreographed event. Picture a large conference room, either at the DOJ offices in Washington or at a U.S. attorney's office.
SPEAKER_01Okay, I'm picturing it.
SPEAKER_00On one side of the table, you have federal prosecutors and federal agents, FBI, CFTC investigators. On the other side, you have high-price partners from Gibson Dunn representing the bank.
SPEAKER_01Aaron Powell And what are they doing?
SPEAKER_00The law firm is there to proffer or offer evidence and a narrative to the government to demonstrate the bank's cooperation. They usually have PowerPoint presentations, binders of selected emails, and a very clear storyline they want the government to adopt.
SPEAKER_01So they're telling a story.
SPEAKER_00Exactly. The unspoken goal is always look at this bad apple we found for you, prosecute him, and let the bank pay a fine and move on.
SPEAKER_01Okay. So in this February 2011 proffer, according to Hayes's sworn declaration, UBS handed over a hand-picked set of Bloomberg chats. Trevor Burrus, Jr.
SPEAKER_00Right. The instant messages.
SPEAKER_01Yeah, these are the instant messages traders use. These chats showed Hayes communicating with interdealer brokers, companies like ICAP and Martin Brokers, about LIBOR submissions. UBS essentially points to the screen and says to the DOJ, look at this guy. He is talking to outside brokers to rig the rate.
SPEAKER_00Aaron Powell Which looks terrible in a vacuum. But to understand why this is so deceptive, we have to understand the mechanism of interdealer brokers.
SPEAKER_01Okay. What do they do?
SPEAKER_00Interdealer brokers are the middlemen of the financial world. Banks use them to trade anonymously with other banks. If UBS wants to buy $100 million of yen swaps, they don't call Citigroup directly. They call a broker at ICAP who finds a seller.
SPEAKER_01Okay, so they're just intermediaries.
SPEAKER_00Yes. These brokers talk to traders at every major bank all day long. They are the information hubs of the market.
SPEAKER_01Aaron Ross Powell So Hayes talking to them is just his job.
SPEAKER_00Yes. But the power of a proffer presentation isn't just in what is shared. It is heavily, almost entirely, dependent on what is deliberately omitted.
SPEAKER_01Aaron Powell And the omissions here, according to the court filings, are staggering. What UBS allegedly did not tell the DOJ in that room was that UBS management had officially and formally engaged these specific brokers for quote-unquote LIBOR services.
SPEAKER_00Aaron Powell Wait, wait, wait. UBS management officially hired them.
SPEAKER_01Yes, according to the documents. Hayes didn't just randomly start chatting with ICAP and Martin Brokers to form a secret conspiracy. The bank had corporate contracts with them.
SPEAKER_00That is a massive omission.
SPEAKER_01And even worse, the documents allege UBS omitted their own written internal LIBOR policies from the presentation.
SPEAKER_00Written policies.
SPEAKER_01Yes, these were formal, written compliance policies that explicitly instructed their LIBOR submitters to consider the bank's trading interests when setting the rate.
SPEAKER_00So he was following policy.
SPEAKER_01Exactly. Furthermore, UBS omitted the existence of daily Yen desk meetings where Hayes openly discussed his communications with submitters at other banks with senior personnel, including Karsten Kengater.
SPEAKER_00So let me get this straight. UBS goes into this conference room with a DOJ. They put up a PowerPoint showing Tom Hayes sending instant messages to a broker about Libor. They tell the DOJ, look at this rogue trader conspiring with outsiders.
SPEAKER_01Yep.
SPEAKER_00But they completely hide the fact that UBS signed a contract with that broker. UBS wrote a policy telling submitters to consider trading positions, and UBS executives sat in meetings every day listening to Hayes talk about doing exactly this.
SPEAKER_01Exactly. They presented the Bloomberg chats in a total vacuum. It is curation by omission. It makes Hayes look like a rogue conspirator while hiding the fact that his actions were directed by written corporate policy. Trevor Burrus, Jr.
SPEAKER_00Facilitated by corporate contracts with brokers.
SPEAKER_01And monitored daily by C-suite executives.
SPEAKER_00It's unbelievable.
SPEAKER_01And the result of this curated storytelling is devastating for Hayes.
SPEAKER_00It really is.
SPEAKER_01The DOJ's December 2012 press release charged Hayes with felony wire fraud. But it is the media narrative that really shows how successful UBS was. Exhibit 14 in this document dump includes a July 2012 Wall Street Journal Infographic.
SPEAKER_00Oh, I've seen that. It explicitly unbelievable.
SPEAKER_01It explicitly cites UBS told regulators as its source, and it physically depicts a silhouette of Tom Hayes sitting as the central mastermind at his computer, manipulating the strings of a global conspiracy, pointing arrows to Citigroup, Deutsche Bank, HSBC, JP Morgan. Trevor Burrus, Jr.
SPEAKER_00UBS fed the media and the government a narrative that this one autistic trader in Tokyo was the spider in the center of a global web of corruption.
SPEAKER_01And to highlight just how deeply UBS controlled this narrative globally, look at the timeline with the UK authorities. The UK's serious fraud office, the SFO, didn't even contact UBS about Hayes until September 2012.
SPEAKER_00Aaron Powell Which is what, 18 months later?
SPEAKER_01Yes. 18 months after UBS had spoon-fed the rogue trader narrative to the U.S. Department of Justice. The SFO's initial outreach letter was literally titled RE, U.S. Department of Justice LIBOR and Uribor investigations.
SPEAKER_00So the UK prosecutors weren't doing independent sleuth thing. They were just following the breadcrumbs that UBS had laid down in Washington.
Media Narrative And Rigged Search Terms
SPEAKER_01Exactly. Now, I want to dig into how UBS managed to curate this evidence so perfectly, because this is where the documents reveal a structural flaw in corporate investigations. How does a law firm look through a massive global bank servers and only find emails that make one guy look bad?
SPEAKER_00The filings expose the exact mechanics of this, and it comes down to e-discovery search terms. Gibson Dunn, as UBS's outside counsel, control the algorithms used to search the bank's servers. The filings note they search roughly 10 million documents.
SPEAKER_0110 million documents is an ocean of data.
SPEAKER_00It is. But they only pull terms linked to Hayes and a few others. For example, the filings show the UBS personnel specific search terms, literally only included Tom Hayes and Hayes as the secondary identifiers.
SPEAKER_01It's like tossing a net into the ocean that is mathematically woven to let the great white shark swim right through while only catching one specific type of tuna.
SPEAKER_00That's exactly what it is. Out of 10 million documents, they design a search algorithm that essentially guarantees they will never look upward at the executives who wrote the policies.
SPEAKER_01Or who approved the broker contracts and who authorized the $2.5 million retention bonuses.
SPEAKER_00By controlling the search parameters, you control the evidence. By controlling the evidence, you control the narrative. It is a completely closed loop of self-preservation. It is a search designed to find a scapegoat, not to find the truth of how the bank operated.
SPEAKER_01Right. And because Hayes has brought all of this devastating documentation, the rigged search terms, the omitted policies, the praise emails directly to the Connecticut Superior Court, UBS is now utilizing intense legal maneuvers to try and shut this case down before a jury ever sees this evidence in open
UBS Motions To Dismiss Explained
SPEAKER_01court.
SPEAKER_00UBS definitely wants this to go away as fast as possible.
SPEAKER_01Oh, without a doubt. We are going to break down UBS's dual motions to dismiss and Hayes' July 17, 2026 objection to them. Trevor Burrus, Jr.
SPEAKER_00UBS is really bringing out the heavy artillery here. They are relying on two primary legal doctrines to try and get this case thrown out of Connecticut entirely. Forum non convenience and a special motion to dismiss under Connecticut's anti-slap statute.
SPEAKER_01Let's start with forum nonconvenience.
SPEAKER_00This is a Latin term that basically means inconvenient forum. UBS is arguing that this case has no meaningful connection to Connecticut, and therefore the judge should dismiss it so it can be moved to New York or England.
SPEAKER_01It is a very bold argument considering the facts we just discussed.
SPEAKER_00Aaron Powell It really is. If we connect this to the bigger picture, in order to win a forum nonconvenience motion in Connecticut, the defendant has to overcome what is known as the Durkin test, named after Durkin v. Interweb, a major Connecticut Supreme Court case.
SPEAKER_01Aaron Powell What's the core of that test?
SPEAKER_00Aaron Powell The central guiding principle of the Durkin test is that a plaintiff's choice of forum should rarely be disturbed unless the balance of factors is strongly in favor of the defendant. The court essentially asks: is it so profoundly inconvenient and unfair to hold the trial here that we must override the plaintiff's right to choose where to sue?
SPEAKER_01Aaron Powell And Hayes' legal team counters this brilliantly in their objection. They walk through the timeline to anchor everything to Connecticut. They argue that UBS is headquartered in Stanford.
SPEAKER_00Which is right there in Connecticut.
SPEAKER_01Exactly. The initial CFTC subpoena that started this entire saga in 2010 was sent to Stamford. The statement of facts, where UBS formally memorialized these alleged lies to the government, was filed in a Connecticut federal court. And the key DOJ prosecutors who worked the case and received the proffers, Eric Glover and Liam Brennan, were based in the U.S. Attorney's Office for the District of Connecticut.
SPEAKER_00And if we look at the mechanics of the Dirk test, two of the most critical factors a judge looks at are the relative ease of access to sources of proof and the availability of compulsory process for trial witnesses.
SPEAKER_01Compulsory process.
SPEAKER_00That means the power of the court to issue a subpoena and force someone to show up and testify under oath, right?
SPEAKER_01Exactly.
SPEAKER_00If the case stays in Connecticut, Hayes has the power of the Connecticut courts to subpoena those Stanford-based UBS employees.
SPEAKER_01The compliance officers who hid the manuals, and potentially those Connecticut-based federal prosecutors to testify in front of a jury.
SPEAKER_00Yes. If the judge agrees with UBS and moves the case to England, Hayes loses all of that power. He can't force an American prosecutor or a Stanford executive to fly to London to testify.
SPEAKER_01The evidence just evaporates.
SPEAKER_00Furthermore, Hayes argues that moving the case to New York could introduce statute of limitation hurdles. Different states have different clocks for when you can file a lawsuit.
SPEAKER_01Oh, so by pushing it across the border to New York, UBS might be seeking a backdoor way to kill the case entirely on a procedural technicality rather than fighting the evidence?
SPEAKER_00That's a very real possibility. Given that the corporate decisions, the lawyers, the subpoenas, and the prosecutors were all heavily anchored in Connecticut. UBS has a very steep hill to climb to prove that Connecticut is an inconvenient place to hold a trial about things that happened in Connecticut.
SPEAKER_01Okay, so forum non-convenience is their first attempt to kill the case. Their second attempt is even wilder and frankly a bit ironic. They are filing
Anti-SLAPP Fight And Deutsche Bank Parallels
SPEAKER_01a special motion to dismiss using Connecticut's anti-Slap statute.
SPEAKER_00Aaron Powell Which is a very aggressive move. Aaron Powell Yeah.
SPEAKER_01SLAP stands for strategic lawsuits against public participation. UBS is claiming that their disclosures to the Department of Justice during those proffer sessions were protected speech, and that Hayes is trying to chill their First Amendment rights by suing them for malicious prosecution.
SPEAKER_00Aaron Powell This is a highly controversial and aggressive use of the statute. We need to look at the history of anti-slap laws to understand why this is so contested. Anti-slap laws were originally designed in the 1980s and 90s to protect regular citizens and grassroots activists from being bullied by massive corporations.
SPEAKER_01Aaron Powell Let's give an example of what it was built for.
SPEAKER_00Okay. Imagine a small community group protesting a massive real estate developer who wants to pave over a wetland. The developer sues the community group for defamation, asking for $10 million.
SPEAKER_01Aaron Powell Just to scare them.
SPEAKER_00Exactly. The developer knows they won't win the lawsuit, but they don't care. The goal of the lawsuit is just to bankrupt the community group with legal fees so they shut up and stop protesting. That is a slap suit.
SPEAKER_01Right.
SPEAKER_00Anti-slap laws allow the community group to go to the judge immediately and say, dismiss this case. It's just meant to chill our free speech.
SPEAKER_01Right. So the law is supposed to protect the little guy protesting a billionaire developer. Now a massive global bank is using it to say, hey, framing our employee to the feds is our First Amendment right, and this employee is bullying us by suing us.
SPEAKER_00Aaron Powell That is the exact paradox Hayes' lawyers are pointing out. They argue that the anti-slap statute does not protect criminal behavior. They argue that intentionally lying to federal prosecutors to frame someone is a criminal offense, specifically a violation of 18 USC section 1001, which makes it a felony to make false statements to federal agents.
SPEAKER_01And criminal offenses are absolutely not protected speech under the First Amendment or any anti-slap statute. You do not have a constitutional right to lie to the FBI.
SPEAKER_00Aaron Powell Exactly. The objection memo file by Hayes specifically states, and I quote, no Connecticut court has held that intentionally lying to law enforcement for the purpose of saving oneself and causing the wrongful prosecution of another constitutes protected petitioning.
SPEAKER_01It's just a wild defense.
SPEAKER_00It's wild.
SPEAKER_01Aaron Powell And to back up this legal theory, Hayes' team cites two major recent New York cases that are incredibly parallel to this one: Connolly v. Deutsche Bank and Black v. Deutsche Bank.
SPEAKER_00Aaron Powell We really should look at these cases because they show how courts are starting to view these corporate throw under the bus maneuvers.
SPEAKER_01Aaron Powell So who were Connolly and Black?
SPEAKER_00Aaron Ross Powell Matthew Connolly and Gavin Black were former traders at Deutsche Bank who were also caught up in the live war investigations. Just like Hayes, they were prosecuted by the government based heavily on evidence and narratives provided by their employer, Deutsche Bank, who had hired their own outside counsel to do an independent investigation.
SPEAKER_01Aaron Ross Powell So they ran the exact same playbook.
SPEAKER_00Exactly. Connolly and Black were convicted, but their convictions were eventually overturned on appeal. Trevor Burrus, Jr.
SPEAKER_01Just like Hayes' conviction was quashed.
SPEAKER_00Right. And just like Hayes, once they were cleared, Connolly and Black turned around and sued Deutsche Bank for malicious prosecution, alleging the bank misled authorities and scapegoated them to protect higher ups.
SPEAKER_01Trevor Burrus, and what happened?
SPEAKER_00Deutsche Bank tried to get the cases dismissed, making very similar arguments to UBS. But in both cases, the federal judges in New York allow the malicious prosecution claims to proceed against the bank, denying the motions to dismiss. The judges essentially recognize that if a bank acts as a proxy for the government and feeds the government lies to initiate a prosecution, the bank can be held liable.
SPEAKER_01So Hayes is arguing that his case is on all fours with Connolly and Black.
SPEAKER_00Exactly. It's the same exact pattern.
SPEAKER_01So we have unpacked the dense legal filings, the history of LIBOR, and the rigged search terms. So what does
Employee Survival Lessons And Big Stakes
SPEAKER_01this all mean for you, the listener? Because while you might not be trading yen LIBOR for billions of dollars on a Tokyo trading floor, the underlying mechanics of what happened to Tom Hayes are happening in cubicles, in HR departments, and on Zoom calls every single day.
SPEAKER_00That is the core takeaway here. This case is a master template for how a hostile work environment can escalate into criminal scapegoating.
SPEAKER_01It really strips away the illusion that HR or corporate compliance is there to protect you.
SPEAKER_00It exposes the absolute vulnerability of employees when the corporation's fundamental survival is threatened.
SPEAKER_01Especially neurodivergent employees. We talked about how UBS valued Hayes' intense focus, his ability to manage immense tail risk during that Lehman crisis, and his singular drive.
SPEAKER_00But they discarded him the moment his social difficulties and abrasive personality made him an easy target to paint his rogue.
SPEAKER_01It highlights how employees who excel at the technical, granular, mathematical aspects of their jobs might completely miss the political machinations of self-preservation happening in the executive suites above them.
SPEAKER_00It is a cautionary tale about office politics on a lethal scale. Hayes was so focused on the math, on the spreads, on the 35% market share that he apparently didn't realize that the executives who were patting him on the back, taking him to dinners, and handing him two and a half million dollar checks were simultaneously drafting the emails and setting up the legal structures that would eventually send him to prison.
SPEAKER_01I want you to really think about this in the context of your own job. Do you have instructions from a boss that aren't in writing? Are you executing a strategy or following a verbal policy that the company will publicly disavow if it ever hits the front page of the Wall Street Journal or triggers an audit?
SPEAKER_00Because UBS had unwritten, informal policies regarding LIBOR that they heavily incentivize their traders to follow. They wanted the profits.
SPEAKER_01But when the DOJ showed up, UBS pointed at the written compliance manual, pointed at Hayes, and said, Look, he broke the rules. They left him holding the bag and hid the evidence that management knew all along.
SPEAKER_00This raises an important question about corporate accountability and the justice system itself. If massive banks can effectively buy immunity for their C-suite executives by serving up mid-level employees to the DOJ on the silver platter, using perfectly curated, algorithmically filtered data, does the justice system actually deter corporate malfeasance or does it just encourage corporations to build better scapegoating mechanisms?
SPEAKER_01If the Department of Justice accepts a 10 million document search that is rigged by a defense firm to only look for the fall guy, they aren't prosecuting corporate crime. They are just processing the corporation's own internal hit list. They are outsourcing justice to the highest bidder.
SPEAKER_00Aaron Powell He really forces us to look critically at the deferred prosecution agreements, or DPAs, that the DOJ routinely hands out to these banks.
SPEAKER_01Aaron Powell What usually happens in those agreements?
SPEAKER_00Aaron Powell In these agreements, the bank pays a massive fine, admits to some vague wrongdoing, and promises to do better. But no executives go to jail. These agreements are celebrated as wins by the government in press releases.
SPEAKER_01But if those billion-dollar fines are just the cost of doing business, the price a bank gladly pays to keep its executives out of prison while sacrificing a Tom Hayes to satisfy the public demand for a conviction, then the regulatory framework is completely broken.
SPEAKER_00Aaron Powell It is a system of legalized bribery where the currency is mid-level employees.
SPEAKER_01And that leads us to a final lingering thought for you to mull over as we close this out. The entire global financial regulatory system, the DOJ, the SEC, the UK's serious fraud office, relies almost entirely on cooperating corporations to police themselves.
SPEAKER_00They rely on the outside counsel, the gives and duns of the world, to do the investigating, run the search terms, and hand over the evidence.
SPEAKER_01But if Tom Hayes goes to trial in Stanford and proves to a jury that UBS used that cooperation to maliciously frame an innocent man just to protect billionaires, it calls into question every single corporate settlement the DOJ has made in the last two decades. Who is really writing the facts of history? Is it the justice system finding the truth? Or is it the corporation with the biggest legal budget writing the script?
SPEAKER_00It is a chilling question, and it is exactly why this case in the Connecticut Superior Court is one of the most important employment and corporate law battles of our time. It challenges the very foundation of how white-collar justice is administered.
Final Questions And Practical Advice
SPEAKER_01Thank you so much for joining us, and thank you for taking the time to truly understand the deep mechanics of this case. You, the listener, are the reason we dig into these dense legal documents so that you can arm yourself with the knowledge to survive and navigate the corporate landscape. Stay vigilant, always document your instructions, and we will see you next time. Take care.