Overcast

Overcast

max temp: 8°C

min temp: 6°C

Search

UK: UBS agrees £940m Libor rigging settlement

PUBLISHED: 08:43 19 December 2012

The UBS offices in the city of London

The UBS offices in the city of London

SWISS bank UBS today agreed to pay £940million to regulators in the biggest penalty yet from the industry’s Libor rate-rigging scandal.

The settlement, which includes a record fine of £160m from the UK’s regulator, the Financial Services Authority, is far larger than the total of £290m paid by Barclays for Libor manipulation this summer.

The FSA said the misconduct at UBS was “extensive and widespread”, with at least 45 individuals including traders, managers and senior managers either involved in, or aware of, the practice.

As well settling with the FSA, UBS has also agreed to pay 1.2billion US dollars (£740m) in fines to the US Department of Justice and the Commodities Futures Trading Commission, and 59m Swiss francs (£40m) to the Swiss Financial Market Supervisory Authority.

UBS said the fines were likely to see it report a loss of between 2bn to 2.5bn Swiss francs (£1.3bn to £1.7bn) for the fourth quarter of 2012.

Sergio Ermotti, chief executive of UBS, said the group had “taken decisive and appropriate actions” following the probe.

He added: “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.”

Zurich-based UBS, which has around 6,500 staff in London, has endured a turbulent year after the jailing of rogue trader Kweku Adoboli.

Libor is an umbrella term for the benchmark inter-bank lending rates which underpin the wider lending market.

The FSA said misconduct at UBS was “all the more serious” as it had attempted to manipulate Libor submissions at other banks, making corrupt payments to reward brokers for their efforts.

Today’s report from the FSA revealed incriminating conversations between UBS traders and brokers, saying they would “play the rules” and “return the favour”.

One trader said: “I need you to keep it (the six-month Japanese Libor rate) as low as possible... if you do that... I’ll pay you, you know, 50,000 dollars, 100,000 dollars... whatever you want... I’m a man of my word.”

Bankers referred to each other in congratulatory terms, such as “the three muscateers (sic)”, “Superman”, and “Captain caos (sic)”, according to the FSA.

The Libor rigging probe, which has embroiled about 20 financial institutions, has accelerated with the first arrests by the Serious Fraud Office taking place last week.

Taxpayer-backed Royal Bank of Scotland has previously said it hopes to settle any claims over Libor manipulation soon and warned that potential penalties could be significant.

Search hundreds of local jobs at Jobs24

Festive trading figures from Dixons Carphone on Tuesday are set to show ongoing woes in its mobile phone arm as the retailer battles to halt sliding sales in the division.

Suffolk Chamber of Commerce has become the first chamber in the country to be accredited for the assessment of Chartered Manager Degree Apprenticeships.

Airbnb has dropped its bid to take over a clutch of UK holiday operators including Hoseasons.

The founder of drinks brand Innocent has launched a scathing attack on the Brexit-backing Wetherspoon boss, accusing him of selling Britain’s economy out for “cheap Chardonnay”.

The government is being urged to end its “love in” with outsourcing work to private firms.

Management Jobs

Show Job Lists

Most read

Topic pages

Newsletter Sign Up

Sign up to the following newsletters:

Sign up to receive our regular email newsletter
MyDate24 MyPhotos24