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View the article online at http://citywire.co.uk/wealth-manager/article/a646618

UBS fined $1.5bn for Libor rigging

by Sarah Miloudi on Dec 19, 2012 at 08:12

UBS fined $1.5bn for Libor rigging

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 UK's Financial Services Authority (FSA).

UBS struck a deal 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.

The Swiss bank is the second major institution to be penalised over attempts to manipulate Libor, after Barclays was handed a £290 million fine by US and UK regulators earlier this year. The scandal also resulted in the loss of its then chief executive Bob Diamond.

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.

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