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UBS fined $1.5bn over Libor fixing

by Daniel Grote on Dec 19, 2012 at 07:18

UBS fined $1.5bn over Libor fixing

UBS has been fined $1.5bn (£940 million) by US, UK and Swiss regulators over its role in the Libor-fixing scandal.

The fines include a record £160 million penalty from the Financial Services Authority (FSA). UBS has agreed to pay $1.2 billion in combined fines to the US Department of Justice and the Commodities Futures Trading Commission, and 59m Swiss francs (£40 million) to the Swiss Financial Market Supervisory Authority.

UBS is the second major bank to be fined over attempts to manipulate the Libor rate, after Barclays was handed a £290 million penalty by UK and UK regulators earlier this year.

UBS chief executive Sergio Ermotti said in a statement: 'We deeply regret this inappropriate and unethical behaviour. No amount of profit is more important than the reputation of this firm, and we are committed to doing business with integrity.'

The FSA said that UBS traders routinely made requests to those at the bank responsible for determining Libor and Euribor submissions to adjust them to benefit trading positions. It added that UBS handed the role of determining those submissions to traders who made a profit due to Libor fixing.

UBS employees also colluded with interdealer brokers to influence Japanese Yen Libor submissions, rewarding them with corrupt brokerage payments, it said.

The regulator said the misconduct was 'extensive and widespread', taking place over six years to the end of 2010. The FSA discovered at least 2,000 documented requests for inappropriate submissions, on  top of an 'unquantifiable' number of oral requests, and said Libor manipulation was openly discussed in internal open chat forums and group emails.

At least 45 individuals at the bank were involved in, or aware of, the Libor fixing, but it was not detected by UBS's compliance department, which undertook five audits over the six years, the FSA said.

Tracey McDermott, FSA director of enforcement and financial crime, said: 'The integrity of benchmarks such as Libor and Euribor are of fundamental importance to both UK and international financial markets. UBS traders and managers ignored this.

'They manipulated UBS’s submissions in order to benefit their own positions and to protect UBS’s reputation, showing a total disregard for the millions of market participants around the world who were also affected by Libor and Euribor.'

UBS's fine follows a cross-border investigation into the bank, and the FSA said it was pursuing a number of other investigations into Libor fixing.

6 comments so far. Why not have your say?

Paul Barnard

Dec 19, 2012 at 08:03

What does the FSA do with the money? Serious question.

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Dec 19, 2012 at 08:14


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Matthew via mobile

Dec 19, 2012 at 08:16

I believe it was used to support the FSCS levy but the government either are or will be using the money generated from fines for goverment spending such as military, etc

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Yellow Monkey

Dec 19, 2012 at 08:42

They need their Christmas bonus of course.

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Simon Mason

Dec 19, 2012 at 08:51

The FSA use it to offset future fees. So their bill last year should have been £650 million but was reduced to £580 million due to £70 million of fines.

Now this is raising so much money the Treasury are going to receive the money!

This means that the FCA will be a completely unaccountable tax raising machine for the Government!!!

No doubt they will be much keener to see the likes of Capita Group fined so they can get some of the £2 billion a year they spend with them, but I forgot £400m of profit makes you poor.

Alternatively, Capita who run 24% of Government admin probably collect the money for the HMRC and so would "forget" to collect it!!!

Alternatively the various ministers will be looking for a future non exec role with them and so not fine them at all.

Is it any coincidence JP Morgan got off so lightly for participating in the Financial Crisis and now Tony Blair is a non exec getting paid £250K A YEAR.

Is it any coincidence that the FSA gave PWC £4.5 million of contracts in a single year and Margaret Cole, jumps ship before RDR begins, and gets a high paid job with them.

Is it any coincidence that Hector Sants is now head of Global Compliance at Barclays, when during his watch the fines for Barclays over LIBOR fixing etc were conspicuous by their absence.

Of course it isn't as they are running the system for themselves and blow the rest of us.

Barclays, UBS and HSBC all have towers within spitting distance of the FSAs tower, but they can't uncover the thousands of acts of criminal fraud that are happening next door!!!

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Paul, Dublin

Dec 19, 2012 at 09:24

It all bodes ill for the planned European supervisory system.

The accountants worry me as much as the banks.

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