UBS AG says it has agreed to pay a total of US$1.5 billion in fines and disgorgement to US, UK and Swiss authorities to resolve LIBOR-related investigations.
UBS will pay approximately $260 million in fines to UK regulator Financial Services Authority (FSA) and $64.5 million as disgorgement of estimated profits to the Swiss Financial Market Supervisory Authority (FINMA) . The UBS board has also authorized a payment of fines totaling $1.2 billion to the US Department of Justice (DoJ) and Commodity Futures Trading Commission (CFTC).
The conduct described in the settlements includes the following:
1. Certain UBS personnel engaged in efforts to manipulate submissions for certain benchmark rates to benefit trading positions;
2. Certain employees at the bank colluded with employees at other banks and cash brokers to influence certain benchmark rates to benefit their trading positions; and
3. Certain personnel gave inappropriate directions to UBS submitters that were in part motivated by a desire to avoid unfair and negative market and media perceptions during the financial crisis.
The conduct encompassed by the settlements includes Yen LIBOR, GBP LIBOR, CHF LIBOR, Euro LIBOR, USD LIBOR, Euribor and Euroyen TIBOR, although the nature and extent of the conduct in question varied significantly from one currency to another.
The resolutions stem from industry-wide investigations into the setting of certain benchmark rates across a range of currencies. These investigations have focused on whether there were improper attempts by banks, either acting on their own or with others, to manipulate Libor and other benchmark rates at certain times.
In a statement, UBS says it has fully cooperated with the authorities in their investigations and significantly enhanced its control framework for its submissions process for LIBOR and other benchmark interest rates.
“During the course of these investigations, we discovered behavior of certain employees that is unacceptable," says UBS CEO Sergio Ermotti. Their misconduct does not reflect the values of UBS nor the high ethical standards to which we hold every employee. We deeply regret this inappropriate and unethical behavior.”