The Swiss bank revealed that it has agreed to pay fines to authorities in the UK, the US and Switzerland to resolve investigations in the Libor-rigging scandal. It is the second bank to be penalised in the affair after Barclays was fined £290m by US and UK regulators in June.
The FSA fined UBS £160m for misconduct relating to Libor and the related Euro Interbank Offered Rate, which is known as Euribor. This is the largest fine ever imposed by the watchdog and is almost three times as large as the £59.5m it fined Barclays for similar offences.
In a statement, the FSA said UBS traders “routinely” made requests for the bank’s Libor and Euribor submissions to be adjusted to benefit their trading positions. Some traders whose positions’ returns depended on Libor or Euribor were given responsibility for setting the bank’s submissions.
The watchdog described UBS’ misconduct as “extensive and widespread”, with at least 2,000 requests for inappropriate submissions being documented and “an unquantifiable number” of oral requests being suspected.
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.”
In the US, UBS will pay a total of £740m to the US Department of Justice (DoJ) and the Commodities Futures Trading Commission. It will also pay £40m to the Swiss Financial Market Supervisory Authority.
Furthermore, the bank agreed to admit to committing wire fraud through its Tokyo office to manipulate Libor rates for Japanese yen-denominated loans.
Sergio Ermott, chief executive of UBS, said: “During the course of these investigations, we discovered behavior of certain employees that is unacceptable. Their misconduct does not reflect the values of UBS nor the high ethical standards to which we hold every employee.
“We have cooperated fully with the authorities and taken decisive and appropriate actions to correct the issues and to strengthen our control processes and procedures.
“We deeply regret this inappropriate and unethical behavior. No amount of profit is more important than the reputation of this firm, and we are committed to doing business with integrity.”
