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Thursday, May 21, 2015

UBS to pay $545 mn in fines to settle forex probe by US authorities

UBS said on Wednesday it has settled a probe by US authorities over alleged rigging of currency markets by agreeing to pay $545 million in combined fines and pleading guilty to one count of wire fraud in a separate matter.

The Swiss bank's disclosure comes as part of what is expected to be a combined bill of more than $5 billion and criminal charges for five of the world's biggest banks in a settlement with US and British authorities over the foreign exchange probe.

UBS said its settlement includes a $203-million penalty for pleading guilty to allegations it rigged Libor benchmark interest rates.

The Zurich-based bank originally reached a settlement on that matter in 2012, but US justice officials cancelled an agreement not to prosecute UBS over Libor as the forex probe mushroomed. The bank at one stage received conditional immunity over forex, because it was the first firm to report the misconduct to US officials.

The bank said US prosecutors would not file charges against the bank in relation to a currency business known as 'V10 structured products', nor its precious metals business.

"The bank continues to cooperate with ongoing investigations by other authorities in this industry-wide matter, which includes investigations of individuals," UBS said in a statement, without specifying.

Wednesday's settlement with the US Department of Justice, the Federal Reserve, and the Connecticut Department of Banking follows a settlement UBS reached six months ago with Swiss financial regulator FINMA, which included a fine and bonus curbs.

"The conduct of a small number of employees was unacceptable and we have taken appropriate disciplinary action," Zurich-based UBS' Chairman Axel Weber and Chief Executive Sergio Ermotti said in a statement.

US banks JPMorgan and Citigroup and Britain's Barclays and Royal Bank of Scotland are expected to plead guilty to criminal charges with the US Department of Justice related to forex rigging, people familiar with the matter have said.

Source : Thehindubusinessline


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